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Best Buy (BBY) Earnings in Q3 2023

best buy Tuesday’s quarterly earnings beat Wall Street expectations, with inflation boosting demand for expensive home appliances more than expected.

At an electronics store, Exceeded expectations for this summer It reiterated its outlook for the holiday quarter. The company has revised its full-year forecast upwards to reflect this, saying it expects organic sales to decline by about 10%.

The company’s shares rose more than 9% on Tuesday. The stock is trading around $77 after he hit $60.78, which is his 52-week low in October.

For the three months ended October 29, the retailer’s performance was as follows: Compared to what Wall Street expected, according to a Refinitiv survey of analysts:

  • Earnings per share: Adjusted $1.38 vs $1.03 expected
  • Earnings: $10.59 billion vs. $10.31 billion forecast

Best Buy’s quarterly results were better than expected, but the pandemic’s impact has pushed consumers to look to the company’s stores for home theaters, computer monitors, kitchen appliances and more while working, playing and cooking from home. From height, demand is declining.

Net sales in the third quarter were down approximately 11% from $11.91 billion a year ago. Net income decreased to $277 million, or $1.22 per share, from $499 million, or $2 per share, in the year-ago quarter.

On a conference call with investors, CEO Corie Barry said sales declined across most of Best Buy’s product categories. However, compared to the same quarter in 2019, compute revenue was 23% higher and appliance revenue remained 37% higher.

Even though consumers paid more for groceries, gas and housing, retailers “saw relatively consistent behavior from buying customers,” she said. But she added that shoppers have a lot of interest in sales events.

“We also see consumers across the board saving less and using credit more,” she said on an investor call. “And value is clearly important to everyone.”

Best Buy sees a more uncertain sales environment this holiday season. Suffering from inflation, some consumers are cutting back on discretionary items and spending more on essentials and experiences.The company joined other retailers This summer, the outlook will be sharply lowered.At the time, the company expected same-store sales to fall about 11% in the 12 months to January.

A month after Best Buy warned of slowing sales, Staff cuts nationwide.

Still, so far, the company has exceeded its own expectations.

According to FactSet, organic sales fell 10.4%, less than the 12.9% decline analysts expected. A key metric, also known as same-store sales, tracks sales online and in stores that have been open for at least 14 months.

And the drop was less than retailers had expected. It warned of a further decline than the 12.1% decline in two quarters.

The company said it has resumed share buybacks. That paused when we lowered our forecast in July. Best Buy said it plans to spend about $1 billion on share buybacks this year.

But Best Buy still sees inflation changing shopping patterns. In a call with reporters, Barry said some low-income consumers opted for cheaper TVs. On the other hand, some wealthy consumers opt for premium products and upgrade to laptops with more features when they upgrade, she said.

As the promotion level rises, CEO Barry says the company is tightly managing inventory, which is down 14.7% year-on-year. Retailers expected a decline in demand, and challenges in supply chains pushed him past the year-ago period, when shipments arrived early and late.

As with many businesses, inventory is a hot metric in the retail industry. Dealing with an Excess of Unwanted Items I had to reduce the price of the item, cancel the order, or pack and store the item.

Holiday shopping patterns are also shifting to more typical pre-pandemic patterns, Barry said on a conference call with investors. The retailer expects customers to shop more during Black Friday, Cyber ​​Monday and her two weeks leading up to Christmas, she said.

Best Buy’s stock has fallen about 30% so far this year, trailing the S&P 500 index. Shares on Monday fell nearly 2% to close at $70.83. The company’s market value is $15.95 billion.

https://www.cnbc.com/2022/11/22/best-buy-bby-earnings-q3-2023.html Best Buy (BBY) Earnings in Q3 2023

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