Best Buy scales back sales guidance after Q3 miss
Best Buy Co. Inc.
$88.48
11:10 26/11/24
Shares in consumer electronics retailer Best Buy dropped sharply on Tuesday after the US group cut full-year financial guidance after missing expectations with its third-quarter results.
The company now expects comparable sales to decline in the range of 2.5% to 3.5% this year, worse from previous estimates of a 1.5% to 3% fall. Adjusted earnings per share are forecast to come in $6.10 to $6.25, compared with prior guidance of $6.10 to $6.35.
Group-wide revenues totalled $9.45bn for the three months to 2 November, down from $9.76bn a year earlier, missing the $9.63bn consensus forecast. Domestic sales fell by 3.3% to $8.70bn, representing a comparable sales decline of 2.8%.
The company blamed a combination of ongoing macro uncertainty, purchasing delays as customers wait for upcoming deals and sales, and "distraction during the run-up to the election", according to chief executive Corie Barry in an earnings call.
Earnings per share for the quarter were $1.26 a share, down slightly from $1.29 reported last year and shy of the $1.30 expected by the market.
Meanwhile, on a call with reporters following the earnings release, Barry warned that Donald Trump's proposed tariffs on imports – particularly from Mexico and China – would result in higher prices at the till.
“There are very, very small margins in this industry, which means the vast majority of that tariff will probably be passed on to the consumer as a price increase," Barry said. “These are goods that people need, and higher prices are not helpful.”
The stock was down nearly 7% at $86.66 by 1131 ET.