best buy Co.
reported a decline in sales and profits in the last quarter and said its results for the current fiscal year will be worse than it had previously expected due to increased promotions and increased supply chain spending.
CEO Corie Barry said the company expects sales to decline this year from March as people shift spending to travel or cut back due to inflationary pressures. “It’s fair to say that we are factoring in elements of weaker demand, but we don’t expect a full recession,” Ms Barry said in a call with analysts on Tuesday.
Best Buy reported profit of $341 million for the quarter ended April 30, up from $595 million a year earlier. The company’s revenue for the quarter fell about $1 billion from a year earlier to $10.6 billion. Comparable sales fell 8%, compared to a 37% increase in the prior year quarter.
The company had not released a guidance for the first quarter, but said after the holiday quarter that it expected sales to decline in fiscal 2023, the retailer’s current year.
On Tuesday, Best Buy said revenue for the year will now be between $48.3 billion and $49.9 billion, down from its March forecast of $49.3 billion at 50, $8 billion. Comparable sales are now expected to fall 3% to 6%, compared to previous guidance of a decline of 1% to 4%.
Best Buy’s first-quarter sales did not fall as much as Wall Street had expected, but earnings fell short of some expectations. Adjusted earnings were $1.57 per share for the quarter, versus expectations of $1.60 per share, according to FactSet.
Shares of Best Buy, which had fallen more than 35% so far this year, rose 1.2% in trading on Tuesday.
Retailers posted mixed results for the first quarter as businesses battled rising transportation and labor costs as well as changing consumer habits. Last week,
posted weaker-than-expected profits and Target executives said people were spending less on goods such as televisions and appliances.
Appliances were an area of strength for Best Buy, while home theater and computer sales were down slightly, Barry said. Promotions on televisions and computers were higher in the first quarter compared to the previous year.
“We are seeing an increase in signals of concern,” she said in a call with reporters. “Consumers are spending more overall, but we’re seeing some of these signals that they’re shifting some of their spending towards experiences, vacations and also more towards essentials due to inflationary pressures.”
On Tuesday, Abercrombie & Fitch Co. posted a quarterly loss, hurt by rising freight and product costs. The clothing retailer warned it expected higher costs for the rest of the year and expected slower sales growth. Shares of the company fell 29% in Tuesday trading.
Meanwhile, Petco Health and Wellness Co. reported higher first-quarter profit as comparable sales rose 5.1% from year-ago levels. Petco CEO Ron Coughlin said consumer spending on pets, which grew rapidly during the pandemic, has continued to rise. Shares rose 3.7% on Tuesday.
After the closing of the American markets,
raised its sales and profit targets for the year after reporting its quarterly results. The department store chain said the return of in-person social events and the rebound in travel had boosted demand for clothing. Nordstrom shares rose 11% in after-hours trading.
—Will Feuer contributed to this article.
Write to Charity L. Scott at [email protected]
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