May 25, 2023
Best Buy tops profit estimates despite continuing sales slump
Lorne Steinberg discusses Best Buy
Best Buy topped profit estimates as it navigated a long sales slump in consumer electronics and household appliances.
The decline in U.S. comparable sales in the current quarter is likely to be shallower than the 10 per cent drop in the first quarter, Best Buy said in a statement Thursday as it reported results. The company stood by the annual financial forecasts it unveiled in March.
Best Buy's steady outlook signals a ray of hope, however faint, after a sharp sales drop last year as consumers retreated from electronics and other discretionary goods. The retailer still has a long road to recovery as inflation forces shoppers to spend more on basic goods, making them think twice before buying televisions, computers and appliances.
“Customers are clearly feeling cautious and making trade-off decisions as they continue to deal with high inflation and low consumer confidence,” Chief Executive Officer Corie Barry said in the statement.
Best Buy rose 4.7 per cent ahead of regular trading in New York. The shares slid 14 per cent this year through Wednesday, while an S&P index of consumer-discretionary companies advanced 16 per cent.
During the first quarter, adjusted earnings totaled US$1.15 a share, compared with the US$1.11 predicted by Wall Street. Sales slid 11 per cent to US$9.47 billion, compared with the US$9.54 billion estimated by analysts.