Best Buy posts better-than-expected 3Q profits but sales sluggish amid spending malaise

NEW YORK – Best Buy Co. posted stronger-than-expected profits for the fiscal 3rd quarter but continues to fight with sales declines as customers pull again extra on purchasing units in an unsure economic system.

The country’s biggest shopper electronics chain additionally reduce its annual sales outlook, sending stocks down 5% in premarket buying and selling.

The activity marketplace has remained resilient, but Americans are dealing with higher prices on many pieces, even because the inflation price is easing. And they are additionally dealing with dearer credit with the Federal Reserve mountaineering benchmark rates of interest to battle inflation. It’s costing extra to take out loans for home equipment, vehicles and homes, or to make use of a credit card. As a end result, shoppers have develop into reluctant to spend until there’s a sale.

“In the newer macro atmosphere, shopper call for has been much more asymmetric and hard to are expecting,” said Best Buy’s CEO Corie Barry in a statement.

The Richfield, Minnesota-based company reported fiscal third-quarter net income of $263 million, or $1.21 per share, for the three-month period that ended Oct. 28. That compares with $277 million, or $1.22 per share, in the year-ago period. Earnings, adjusted for non-recurring costs and amortization costs, were $1.29 per share. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $1.19 per share.

The consumer electronics retailer posted revenue of $9.76 billion in the period, falling short of Street forecasts. Eleven analysts surveyed by Zacks expected $9.88 billion. In the year-ago period, sales were $10.59 billion.

Comparable sales — business coming from its stores and its online channels — fell 6.9% in the quarter.

Best Buy expects full-year earnings in the range of $6 to $6.30 per share, with revenue in the range of $43.1 billion to $43.7 billion. That compares to prior revenue guidance of $43.8 billion to $44.5 billion.

Analysts are expecting $6.19 per share on revenue of $44.14 billion.

It also expects a comparable sales decline of 6% to 7.5% for the year, deeper than the previous guidance of a decline of 4.5% to 6%. _____ Elements of this story was generated by Automated Insights ( http://automatedinsights.com/ap ) the use of information from Zacks Investment Research.