People enter a Best Buy store at a Brooklyn mall on August 29, 2023 in New York City.
Spencer Platt | Getty Images
The best buy raised its fiscal year profit forecast on Thursday after beating earnings and revenue expectations for the most recent quarter.
The retailer now expects full-year adjusted earnings per share in the range of $6.10 to $6.35, up from a previous range of $5.75 to $6.20. However, the company lowered the high end of its guidance ranges for both full-year revenue and comparable sales.
“As we look ahead to the second half of the year, we expect our industry to continue to show increasing stabilization,” Best Buy Chief Financial Officer Matt Bilunas said in the company's press release.
Best Buy shares rose more than 14% in premarket trading Thursday.
Here's how the consumer electronics retailer fared during the period ending Aug. 3 compared with what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: $1.34 vs. $1.16 expected
- Revenue: $9.29 billion versus $9.24 billion forecast
The company reported net income for the quarter of $291 million, or $1.34 per share, compared with $274 million, or $1.25 per share, a year earlier.
Net sales in the quarter fell to $9.29 billion from $9.58 billion during the same period a year earlier.
Comparable sales decreased 2.3% during the quarter, compared with a decline of 6.2% a year earlier.
Best Buy has been in the midst of a turnaround attempt in response to a two-year sales slump. Discretionary retailers in general have struggled with weaker consumer demand in the wake of unusually high sales during the Covid pandemic and as consumers hold back due to high inflation.
As the expected pandemic-era tech purchasing replacement cycle begins to arrive, the retailer is hoping to capitalize on it through marketing and operational initiatives. Best Buy said in July that it would add trained sales teams to three key parts of its stores — computers, appliances and home theater — and launch a marketing campaign that includes YouTube videos to attract consumer interest.
The company was also banking on a wave of new tech gadget launches, such as a collection of new iPads launched by Apple In May, laptops with artificial intelligence were promoted. Microsoftto boost sales.
On Thursday, the company reported 6% comparable sales growth in the tablet and home computer categories. However, that was “more than offset” by declines in appliances, home theater and gaming, executives said.
“We've capitalized on demand driven by our customers' desire to replace or upgrade their products, combined with new innovations,” CEO Corie Barry said during the company's earnings conference call. “We see a consumer who is looking for value at sales events and is also willing to spend on high-priced products when they need it or when there's a compelling new technology.”
Barry said AI could continue to drive sales across all categories for years to come.
“We believe we are just at the beginning of AI's impact on technological innovation and customer demand,” he said.
