Best Buy (BBY) is expected to report another weak quarterly sales as consumers put off big-ticket purchases.
Before the market opened on Thursday, the company expects revenue to fall 3.62% to $9.24 billion and earnings per share to fall about 5% to $1.16.
Same-store sales are expected to fall 3.17% for the quarter as categories like electronics and entertainment continue to struggle.
Last quarter, CEO Corey Barry told Yahoo Finance on a media call that the company remains “imbalanced” as consumers continue to prioritize essentials like food, fuel and lodging.
The report comes after Best Buy made improvements during the quarter, including introducing a new tagline, “Imagine That,” updating the look and feel of its app and adding experience spaces in its stores.
The second-quarter outlook is in line with first-quarter results, when home appliances, entertainment and consumer electronics slowed sales growth.
“Our concern is that Best Buy is losing share in major appliances and TVs,” Evercore ISI analyst Greg Melich wrote in a client note.
“We believe that charging for installation of our products is reducing the company's share of a product that represents approximately 30 percent of our sales,” Melich added.
Best Buy has been investing in the service, rolling out live delivery and installation tracking within its app in the second quarter.
Joe Feldman of Telsey Advisory Group expects the company to continue to be under pressure in its second-quarter results, saying slowing demand following the pandemic and “challenging macroeconomic trends weighing on consumers” will remain headwinds, he wrote in a client note.
But Feldman expects the company to “show signs of stabilizing” and return to growth in the second half of 2024 as new products and replacement cycles begin, especially for products purchased in 2019 and 2020.
Artificial intelligence products could also boost sales.
“Artificial intelligence (AI)-centric innovations like Microsoft's new Copilot laptop are starting to gain traction, a trend that is expected to intensify as more new tech products hit the market during the back-to-school season,” he wrote.
Consumers planning back-to-school spending are seeing a 4% net increase in spending on electronics from a year ago, up from roughly flat spending in last year's survey, according to a survey by Morgan Stanley analyst Alex Straton. Straton called that a “potential boon” for Best Buy, which primarily sells electronics.
The story continues
Read more: 5 Clever Ways to Save on Back to School Supplies
Revenue Breakdown
According to Bloomberg consensus, Wall Street expects Best Buy to post the following second-quarter results compared to the same period last year:
Adjusted earnings per share: $1.22 to $1.16
Net sales: $9.24 billion ($9.58 billion in the same period last year)
Same-store sales growth: -3.17% vs. -6.20%
Total US same-store sales growth: -6.30% vs. -3.33%
Sales growth rate:
Appliances: -16.1% vs. -9.93%
Entertainment: -7.5% compared to 9%
Appliances: -5.7% vs. -4.67%
Computers and mobile phones: -0.7% (-6.4%)
Services: 5.42% vs. 7.6%
International: -5.40% vs. -2.12%
Following its first-quarter earnings release, the company issued full-year revenue guidance of $41.3 billion to $42.6 billion.
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow @ on X.Brooke DePalma Or email me at [email protected]
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