Best Buy cuts sales forecast, as holiday shoppers hunt for deals

Best Buy cut its full-year sales outlook Tuesday, as the company weathers a period of cooler demand and prepares for price-conscious holiday shoppers.

The consumer electronics retailer beat Wall Street’s quarterly earnings expectations, but fell short on revenue.

Best Buy said it now expects revenue to range from $43.1 billion to $43.7 billion for the fiscal year, down from its previous range of between $43.8 billion to $44.5 billion. The retailer said it expects comparable sales to decline by between 6% and 7.5%, lower than its previous guidance of a 4.5% to 6% drop.

It also lowered the high end of its profit guidance, saying it expects adjusted earnings per share to range from $6 to $6.30 instead of between $6 and $6.40.

CEO Corie Barry said in a news release that Best Buy anticipated softer sales of consumer electronics this year. But with an economic backdrop marked by high inflation and the Federal Reserve’s campaign to cool down spending, she said consumer demand “has been even more uneven and difficult to predict.”

She said the retailer is ready for the holiday season and “prepared for a customer who is very deal-focused with promotions and deals for all budgets.”

Here’s how the company did for the fiscal third quarter ended Oct. 28, compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $1.29 adjusted vs. $1.18 expected
• Revenue: $9.76 billion vs. $9.90 billion expected

Best Buy said net income for the three-month period dropped to $263 million, or $1.21 per share, from $277 million, or $1.22 per share, in the year-ago period. Revenue fell from $10.59 billion a year earlier.

Shares of Best Buy closed at $68.11 on Monday. So far this year, the company’s stock has tumbled about 15%, underperforming the 18% gains of the S&P 500 during the same period.

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