Televisions are seen for sale at a Best Buy store in New York City.
Andrew Kelly | Reuters
Best Buy on Tuesday said sales dropped by about 13% in the second fiscal quarter, as the retailer felt a pullback from inflation-weary shoppers.
The retailer reaffirmed its full-year guidance, saying it expects softer demand for consumer electronics as people pay more for groceries and gas. It expects same-store sales to drop by about 11% for the 12-month period ended in January. The company had cut its full-year and second-quarter forecast in late July.
Here’s how the retailer did in the three-month period ended July 30 compared with what Wall Street was anticipating, according to a survey of analysts by Refinitiv:
- Earnings per share: $1.54 adjusted vs. $1.27 expected
- Revenue: $10.33 billion vs. $10.24 billion expected
Best Buy’s quarter reflects a sharp change in consumer spending habits. A year ago, the retailer saw sales rise nearly 20% as shoppers bought TVs, laptops and more to sustain pandemic-fueled habits like working from home and streaming movies.
Now, however, some of those patterns have faded as people go back to the office or go on summer vacations. Some consumers are skipping over big-ticket and discretionary items as they pay more for necessities.
Sales online and at stores open at least 14 months, a key metric known as same-store sales, declined by 12.1% versus the year-ago period. That’s slightly better than Best Buy’s guidance, which anticipated an approximately 13% drop for the current three-month period.
Best Buy’s quarterly net income fell to $306 million, or $1.35 per share, from $734 million, or $2.90 per share, a year earlier. Excluding items, it earned $1.57 per share.
As of Monday’s close, Best Buy shares are down about 27% so far this year. Shares closed Monday at $73.70, down less than 1%. The company’s market value is about $16.6 billion.
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