Best Buy Earnings Top Expectations, But Retailer Slashes Full-Year Forecast

Q.ai — a Forbes Company
3 min readAug 30, 2023
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Key takeaways

  • Best Buy was up on earnings and revenue expectations
  • Sales were down as expected due to the tricky macroeconomic environment
  • Best Buy shares rose as much as 5.1% at the earnings beat

Discount tech retailer Best Buy’s second-quarter earnings report sent the stock flying higher this week, with investors excited to hear that the company’s CEO thinks the consumer tech lull is ending soon. There was enough good news to outweigh the bad and keep Wall Street happy. Let’s get into the details.

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What happened with Best Buy’s earnings?

Electronics retailer Best Buy posted earnings of $1.22 a share based on $9.58 billion revenue, which outstripped analyst expectations of $1.06 a share on revenue of $9.52 billion. Comparable sales across online and stores decreased 6.2% as the company struggled with consumers pulling back on tech spending.

Best Buy lowered the top end of its sales outlook for the next year and is now anticipating fiscal 2024 revenue to arrive at between $43.8 billion and $44.5 billion. Best Buy expects sales to decline by at least 4.5% instead of 3% as previously predicted.

Best Buy CEO Corie Barry lamented the “various macroeconomic factors that we are all too familiar with” as an impact on the business but also commented that the tech sales low is ending. “Next year, the consumer electronics industry should see stabilization and possibly growth,” Barry added.

How did Wall Street react?

Better-than-expected results and a positive outlook on tech sales going forward? That was enough for Wall Street to overlook the downgraded full-year sales guidance Best Buy posted. The stock rose as much as 5.1% during trading on Tuesday and closed 2.7% higher, compared to the S&P 500’s 1.45% gain.

It was a much-needed boost for Best Buy’s share price, which has overall declined 4.3% since the start of the year. Retailers, on the whole, have had a difficult 2023, with consumer spending power weakened by high inflation and interest rates, with a notable exception being value brands. Walmart has gained nearly 11.5% this year to date, while Target has dropped 17%.

The bottom line

Based on its data, Best Buy is optimistic about the future, which was enough for investors to jump in and boost the share price. There’s a lot riding on the tech cycle coming back around again, which may not materialize in the way Best Buy hopes if the Fed raises interest rates any further. We’ll have to wait and see.

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Q.ai — a Forbes Company

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