People walk into a Best Buy store in a shopping mall in Brooklyn, New York City on August 29, 2023.
Spencer Platt | Getty Images
Best buy raised its fiscal year profit forecast on Thursday after beating profit 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 forecast 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 stabilize,” Best Buy CFO Matt Bilunas said in the company’s press release.
Shares of Best Buy rose 6% in premarket trading on Thursday.
Here's how the consumer electronics retailer performed in the period through Aug. 3 compared to what Wall Street had expected, based on a survey of analysts by LSEG:
- Earnings per share: $1.34 vs $1.16 expected
- Gain: $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 fell to $9.29 billion in the quarter, compared to $9.58 billion in the same period a year earlier.
Comparable sales fell 2.3% in the quarter, compared to a decline of 6.2% a year earlier.
Best Buy has been struggling with an attempted turnaround as it responds to a two-year sales slump. Discretionary retailers across the board have struggled with weaker consumer demand in the wake of unusually high sales during the Covid pandemic and as consumers pull back amid high inflation.
As the long-awaited replacement cycle of pandemic-era tech purchases begins to trickle 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 areas of its stores — computers, appliances and home theater — and launch a marketing campaign using YouTube videos to pique consumer interest.
The company also said it is betting on a wave of new tech gadgets, such as a collection of new iPads that will be launched by Apple in May and laptops with artificial intelligence that by Microsoft.
During its fiscal first-quarter earnings report in May, Best Buy executives said they expected sales trends to “sequentially improve” through 2024 and the industry to stabilize in 2024.
According to the latest research from market research firm Circana, sales of consumer electronics are on a downward trend and are expected to decline by another 2% in 2024.