Best Buy Co. turned in mixed results on diminished expectations for the spring quarter, squeezed by slowing sales and growing costs. Executives lowered their outlook for the rest of the year.
Best Buy executives and analysts had anticipated a decline in the February-through-April period. Its sales beat analysts' expectations, but inflation and the need for product markdowns took a slightly bigger hit than expected on its profit.
Richfield-based Best Buy said it earned $341 million, down 43% from $595 million in the same period a year ago. That amounted to an adjusted per-share profit of $1.57, below the $1.61 forecast of analysts surveyed by Reuters.
Revenue was $10.6 billion, beating the consensus forecast of analysts of $10.4 billion. But that was down 9% from a year ago. Cost of sales fell just 7%, helping to erode profits.
"Even with the expected slowdown this year, we continue to be in a fundamentally stronger position than we were before the pandemic from both a revenue and operating income rate perspective," Corie Barry, Best Buy chief executive, said in a statement.
Best Buy shares, after initially rising in premarket trading indications, were flat this morning.
Similar to other retailers, such as Target Corp., that reported results last week, Best Buy executives said economic conditions turned out to be worse than they expected just a few months back. They said they expected the pressure on both revenue and profits to continue in the current quarter.
Executives lowered their sales expectations for the full year to a decline of 3% to 6%, from a previously-forecasted decline of 1% to 4%.
