People walk into a Best Buy store in a Brooklyn mall on August 29, 2023 in New York City.
Spencer Platt | Getty Images
Best Buy raised its fiscal-year profit guidance Thursday after exceeding earnings and revenue expectations for the most recent quarter.
The retailer now expects to see full-year adjusted earnings per share in the range of $6.10 to $6.35, up from a prior range of $5.75 to $6.20. The company, however, lowered the top end of its guidance ranges for both full-year revenue and comparable sales.
“As we look to the back half of the year, we expect our industry to continue to show increasing stabilization,” Best Buy CFO Matt Bilunas said in the company’s press release.
Shares of Best Buy jumped 6% in premarket trading Thursday.
Here’s how the consumer electronics retailer did for the period ended August 3 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: $1.34 vs. $1.16 expected
- Revenue: $9.29 billion vs. $9.24 billion expected
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 dropped to $9.29 billion from $9.58 billion during the same period a year earlier.
Comparable sales declined 2.3% during the quarter, compared with a 6.2% decline a year earlier.
Best Buy has been in the midst of an attempted turnaround in response to a two-year sales slump. Discretionary merchandise retailers across the board have struggled with softer consumer demand in the wake of unusually high sales throughout the Covid pandemic and as consumers pullback due to high inflation.
As the much-awaited replacement cycle of pandemic-era tech purchases starts trickling in, the retailer is hoping to cash in through marketing and operational initiatives. Best Buy said in July that it will add trained sales teams to three key parts of its stores — computing, appliance, and home theater — and kick off a marketing campaign that includes YouTube videos to draw consumer interest.
The company also said it was betting on a wave of new tech gadget debuts, such as a collection of new iPads launched by Apple in May and artificial intelligence-enabled laptops touted by Microsoft.
During the company’s fiscal first-quarter earnings call in May, Best Buy executives said they expected sales trends to “sequentially improve” and industry stabilization to increase in 2024.
Consumer electronics sales have been on a downward trend and are forecast to decline by another 2% in 2024, according to latest research by market research firm Circana.