NEW YORK — Best Buy, the leading retailer in consumer electronics in the United States, announced a decrease in quarterly sales on Tuesday as consumers continue to prioritize essential items over gadgets and appliances. This sales decline led to a revision in the company’s annual sales and profit forecast, causing a decline of 2.6% in its stock during premarket trading.
For the quarter ending on November 2, Best Buy posted earnings of $273 million, or $1.26 per share. This is an increase from $263 million, or $1.21 per share, earned during the same period last year. However, overall sales dropped to $9.45 billion from $9.76 billion in the corresponding quarter the previous year. Analysts had predicted earnings of $1.30 per share alongside sales of $9.63 billion.
Comparable sales, which include both online and in-store transactions, fell by 2.9% in this latest quarter. The retailer noted declines in certain categories including appliances, home theater systems, and gaming, although these losses were somewhat balanced by growth in computing, tablets, and services.
According to CEO Corie Barry, the decline in sales can be attributed to a combination of ongoing economic uncertainty, consumers holding off for promotions and deals, as well as distractions associated with the election period affecting non-essential item purchases. Barry mentioned that, in the early weeks of the fourth quarter, there has been a resurgence in customer demand as the holiday shopping season commences and the election is now over.
The current sales trends mark a significant contrast compared to the peak of the pandemic. During that time, Best Buy experienced a surge in sales as consumers spent heavily on electronics for remote work and online education; financial assistance through government stimulus checks also played a role in this increased spending.
To stimulate sales, Best Buy is revamping its brick-and-mortar stores to attract more shoppers and enhancing its paid membership services. Additionally, the company is streamlining its management structure while boosting its workforce in stores to assist customers more effectively.
Looking ahead, Best Buy has now revised its expected annual sales to fall between $41.1 billion and $41.5 billion, down from its earlier estimate of $41.3 billion to $41.9 billion. Analysts had forecasted sales of $41.54 billion. The company also revised its expected earnings per share to a range of $6.10 to $6.25, compared to an earlier outlook of $6.10 to $6.35, while analysts anticipated earnings of $6.26 per share.