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11/21/2023

Best Buy sales fall amid ‘uneven’ consumer demand; sees ‘deal-focused’ holiday

Marianne Wilson
Editor-in-Chief
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Best Buy reported first-quarter net sales of $9.47 billion.
Best Buy reported total revenue of $9.756 billion for its third quarter.

Best Buy reported better-than-expected profits on slightly softer-than-expected revenue for its third quarter as consumers continue to rein in spending on certain items.

The nation’s largest consumer electronics also lowered its full-year revenue forecast based on  third-quarter sales trends and November sales to date.  

Best Buy posted net income of $263 million, with earnings per share of $1.21, for the quarter ended Oct. 30, down from $277 million, or $1.22 a share, in the year-ago period. Adjusted earnings came to $1.29 per share, ahead of the $1.19 analysts had expected.

Total revenue fell 7.8% to $9.756 billion from $10.587 billion, missing estimates of $9.897 billion.  Domestic revenue was down 8.2% to $9.00 billion. 

Total  same-store sales fell 6.9%, with a 7.3% decline in the U.S., which was more than expected. The  largest drivers of the comparable sales decline were appliances, computing, home theater and mobile phones.

Domestic online revenue of $2.75 billion decreased 9.3% on a comparable basis. As a percentage of total domestic revenue, online revenue was 30.6% versus 31.0% last year.

Best Buy’s revamped membership program brought in 35% more new paid members compared to last year. It now has some 6.6 million members.

 “These results demonstrate our ongoing, strong operational execution as we navigate through the near-term sales pressure our industry has been experiencing for the past several quarters,”said CEO Corie Barry. “We are excited for the important holiday season and are prepared for a customer who is very deal-focused with promotions and deals for all budgets, new shopping experiences, an expanded product assortment, and fast and free fulfillment.”

Barry continued, “In the more recent macro environment, consumer demand has been even more uneven and difficult to predict. Based on the sales trends in Q3 and so far in November, we believe it is prudent to lower our annual revenue outlook. The midpoint of our annual non-GAAP diluted EPS guidance is slightly higher than the midpoint of our original guidance as we entered the year.”

Best Buy now expects full-year revenue to range from $43.1 billion to $43.7 billion, compared with its previous guidance of $43.8 billion to $44.5 billion. It expects adjusted earnings per share of $6.00 to $6.30 vs. prior guidance of $6.00 to $6.40. 

Same-store sales are expected to fall 6.0% to 7.5%, compared with prior guidance for a decline of 4.5% to 6.0%.