Best Buy Cuts Forecast on ‘Uneven’ Demand Ahead of Black Friday

Olivia Rockeman and Matt Townsend, Bloomberg News

A Best Buy store in Louisville, Kentucky, US. Photographer: Jon Cherry/Bloomberg , Bloomberg

(Bloomberg) -- Best Buy Co.’s same-store sales fell by more than expected in the third quarter after what the retailer called “uneven consumer demand.” That weakness led the chain to cuts its annual forecast for sales and profitability as the core holiday shopping season kicks off this week with Black Friday.

In a sign of just how unpredictable the holiday shopping season may be, Best Buy said its same-store sales will fall in a range of 3% to 7% in the fourth quarter. November comparable sales so far are down near the bottom of that range, said Matt Bilunas, Best Buy’s chief financial officer, on the earnings call.

Chief Executive Officer Corie Barry also highlighted a lack of innovation in the consumer electronics category during the call.

Big-ticket items have been especially weak, with the retailer calling out softness in pricey categories such as home theater and computing.

Sales this fiscal year will be as much as $43.7 billion, down from previous guidance of $44.5 billion, the company said on Tuesday. The chain also reduced the high end of its outlook for adjusted earnings per share for this year by 10 cents to a high of $6.40.

The shares fell 4.4% at 9:46 a.m. on Tuesday in New York. Best Buy slid 15% this year through Monday, while the S&P 500 index advanced 18%.

Best Buy’s results echo a broader drop in discretionary spending from a year ago across retail. Macy’s Inc., Target Corp. and Gap Inc. also recently reported declines in same-store sales.

Read More: Wealthier Americans Are Pulling Back on Spending

At Best Buy, comparable appliance sales fell by 15% last quarter in the US. Same-store sales for all categories sank by 7.3% in the region. Sales weakened through the third quarter, with October performing the worst, said Bilunas.

“Some 3Q sales may have been pushed to 4Q if consumers waited for big deal days, like Black Friday, to buy electronics and appliances, which could put sales and margin within the upper end of fiscal 2024 guidance,” Lindsay Dutch, BI industry analyst, said in a note.

(Updates shares, with executive comments in the third and fourth paragraphs and with analyst comment in final paragraph.)