Demand continues to be weak, but company doesn't plan for recession, according to Best Buy
Demand continues to be weak, but company doesn’t plan for recession, according to Best Buy

Best Buy reported lower sales in the fiscal first quarter, and the retailer lowered its outlook for the year, citing weak demand that did not appear to be abating.

“This trend continued into the second quarter and doesn’t look like it’s slowing down anytime soon,” Best Buy CEO Corey Barry said on an analyst call Tuesday.

The economy has soured since the company provided guidance at the investor day. But while Best Buy included this in its outlook, Barry said the company “is not planning a full-blown recession.”

Even as consumers focus on their budgets, Best Buy sells items that are becoming increasingly important in their lives, she said. The company’s first-quarter revenue didn’t drop as sharply as Wall Street had expected.


“Consumer electronics is a stable industry over time,” Barry said. “The last two years have really highlighted the importance of technology in people’s lives, so I think it’s important for us to use that as a context.”

Shares rose less than 1% after rising about 9% before the open.

Here’s how the retailer fared in the three months ended April 30, compared with Wall Street expectations, according to a Refinitiv poll of analysts:

  • Earnings per share: $1.57 adjusted, $1.61 expected
  • Revenue: $10.65 billion vs. $10.41 billion expected

Best Buy now expects full-year sales to be between $48.3 billion and $49.9 billion, compared with previous guidance of $49.3 billion to $50.8 billion. Same-store sales will fall by 3% to 6%, compared with the 1% to 4% decline previously expected. It expects adjusted EPS of between $8.40 and $9.00, compared with previous guidance of $8.85 to $9.15.

Best Buy’s first-quarter net income fell to $341 million, or $1.49 a share, from $595 million, or $2.32 a share, a year earlier. Excluding special items, adjusted earnings per share were $1.61.


Net sales fell to $10.41 billion from $11.64 billion a year earlier.

Best Buy’s same-store sales fell 8% from a year earlier, beating analysts’ expectations for an 8.6% decline, according to FactSet.

Investors have been scouring retailers’ earnings for signs of the health of the U.S. consumer as inflation rises. At Best Buy, some feared the company would be particularly vulnerable. Compared to a quarter last year, it faced pandemic-driven demand for home theaters, computer monitors and kitchen appliances. This resulted in a 37.3% increase in same-store sales.


Best Buy told Wall Street at an investor day in March that sales were slowing after two years of very strong demand. However, CFO Matt Bilunas said the company ultimately expects demand to exceed pre-pandemic sales over the next few years.

Walmart and Target added to investor concerns last week. Both major retailers reported sales growth in the fiscal first quarter, but missed Wall Street’s earnings estimates as fuel and freight costs soared and consumer demand for higher margins and discretionary purchases fell. Specifically, Target CEO Brian Cornell said customers have been skipping big-ticket items like TVs and kitchen appliances — items that Best Buy also sells.

The retailer results led to a sharp sell-off on Wall Street last week, dragging Best Buy shares to a 52-week low on Friday.

Shares rose less than 1% to close at $72.59 on Monday. Shares of the company have fallen about 29% so far this year, lagging the S&P 500’s decline of about 17% so far this year.

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Jake Smith

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Jake Smith

He is the editor of Eragoncred. Previously, he was editor-in-chief of Eragoncred and a financial industry reporter. Jake has spent most of his career as a Digital Media journalist and has over 10 years of experience as a writer and editor.