On Tuesday, Best Buy (BBY) reported its second quarter results, and it exceeded analysts’ estimates. However, the giant retailer lowered its sales outlook for the year as there is a slowdown in spending on electric items, computers, kitchen items and more. This trend has been seen among other retailers as well since consumers prefer spending on travel and experience after the big expenditure during the pandemic. The stock price jumped by almost 5 percent, early trading.
Accordingly, to Refinitiv, the earnings per share was $1.22 while analysts had estimated $1.06. Best Buy also posted a higher revenue of $9.58 billion compared to analysts’ expectations of $9.52 billion.
During the fiscal second quarter ending July 29, the consumer electronics retailer saw its net income fall to $274 million, which is $1.25 per share. In the same quarter last year, net income was $306, which is $1.35 per share.
Best Buy also saw a fall in comparable sales of 6.1 percent. Online sales year over year fell by 7 percent but continued to account for about 30 percent of its total revenue which is comparable to online sales in 2022.
Best Buy lowered its outlook for the year. Its earlier revenue estimates ranged between $43.8 billion to $45.2 billion. The new revenue estimate is now expected to be between $43.8 billion to $44.5 billion. It has also lowered comparable sales from 4.5 percent to 6 percent while the earlier guidance ranged from 3 percent to 6 percent.
Best Buy has raised its expected profit. The consumer electronics retailer is expecting adjusted earnings per share to range from $6 to $6.40 while its earlier estimate was between $5.70 to $6.50.
Best Buy, Home Depot and Lowe’s had high revenues and profits during Covid. However, all these retailers and several others have seen a slowdown. These retailers hope to see an improvement by the end of the year during the holiday season quarter.
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