Consumer electronics retailer Best Buy on Tuesday beat Wall Street's earnings target for its fiscal third quarter but sales were weaker than expected. It also disappointed with its outlook for the holiday quarter. BBY stock fell on the news.
The Richfield, Minn.-based company earned an adjusted $1.29 a share on sales of $9.76 billion in the quarter ended Oct. 28. Analysts polled by FactSet had expected earnings of $1.19 a share on sales of $9.9 billion. On a year-over-year basis, Best Buy earnings declined 7% while sales fell 8%.
Best Buy's sales and earnings now have fallen for eight straight quarters on a year-over-year basis.
For the current quarter, Best Buy forecast adjusted earnings of $2.49 a share on sales of $14.59 billion. That's based on the midpoint of its outlook. Analysts had been expecting earnings of $2.66 a share on sales of $15.18 billion in the fiscal fourth quarter. In the year-earlier period, Best Buy earned an adjusted $2.61 a share on sales of $14.74 billion.
BBY Stock Drops After Report
On the stock market today, BBY stock fell 0.7% to close at 67.62.
"In the more recent macro environment, consumer demand has been even more uneven and difficult to predict," Chief Executive Corie Barry said in a news release. "Based on the sales trends in Q3 and so far in November, we believe it is prudent to lower our annual revenue outlook."
Consumers are likely to be "very deal-focused" this holiday season, she said.
From a merchandising perspective, the biggest sales declines in the third quarter were in appliances, computing, home theater and mobile phones. Those declines were partially offset by growth in video game products.
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