Consumer electronics retailer Best Buy has beaten analysts’ expectations and looks to a better market condition in the following quarters amid lower sales turnout in the latest quarter of its fiscal year.
“That trend has continued into the beginning of Q2, and it does not appear that it will abate in the near term,” said Corie Barrie, Best Buy’s CEO, on Tuesday. However, the company is hopeful that things will go well and said they are not “planning for a full recession.”
The company said that even when consumers limit their budget, many still purchase merchandise necessary for their lives. When compared with Wall Street’s expectations on how much they’re going lose in profits, the decline isn’t as severe at all, says Best Buy.
″Consumer electronics over time is a stable industry,” Barry said. “The last two years have clearly underscored the importance of tech in people’s lives, so I think it’s important for us to have that as a backdrop.”
On Tuesday, Best Buy’s shares rose 1.21% to $73.47, taking gains during the quarter. During the last three month period, Best Buy has upset analysts’ expectations b meeting them with better performance in sales and stocks.
Wall Street analysts have projected a $1.61 per share when the company’s fiscal period would end; however, Best Buy finished with $1.57 — a difference of only $0.04. Meanwhile, the expected revenue is $10.41 million; Best Buy earned $10.65 million.
Despite these comparisons, it cannot be underscored how the economy and the market show signs of decline because of significant developments in the US and abroad.
Best Buy projects full-year revenue of $48.3 to $49.9 billion – a bit lower than their expectation, pegging it at $49.3 to $50.8 billion. The company also said that same-store sales would experience a 3% to 6% drop while earnings per share range from $8.40 to $9.00. These figures are lower than their prior outlooks.
During the latest quarter, the company’s net income dipped from $595 million to $341 million. Last year, the annual sales amounted to $10.65 billion – a drop from $11.64 billion in the previous year.
Best Buy’s Chief Financial Officer Matt Bilunas said that the revenue drop could be attributed to declining purchases in computing and home theater merchandise.
Best Buy announced that it would be opening new stores in Chicago, Phoenix and Houston. The company also said they would have 45 remodels across 1,000 locations nationwide as well. This is amid the company keeping fewer workers. Barry said that it is logical considering that services are now moving online.
Technology has now become an essential part of our lives, with the average American household containing at least 12 devices. This is where they get confident that Best Buy’s merchandise will still sell despite today’s volatile markets in America, noted Barry.
