Best Buy Joins Chorus Of Weary Retail Outlook For Holiday Season
Despite pulling in a 21 percent growth in adjusted profit from August to October, Best Buy shares sunk in early morning trading after it joined the growing list of retailers giving a weary outlook for the crucial holiday season.
Through the three-month period ending October 31, the Richfield-based electronics retailer reported on Wednesday revenue of $8.8 billion, which was boosted by a double-digit percent increase in appliance sales, as well as computing, health-related wearables and large-screen TVs. But its sales shortfalls with tablets, mobile phones and digital imaging products couldn’t save it from a 2.4 percent drop in revenue from a year ago.
The company’s adjusted profit was 41 cents per share, which amounted to 7 cents more than its third quarter posting last year. Best Buy’s adjusted profit per share even beat expectations by analysts surveyed by Thomson Reuters, who predicted 35 cents per share.
Best Buy’s online presence has continued on its upward trend, bringing in $709 million in revenue—an 18.3 percent increase from the same time last year.
In a company release, executives alluded to potential softness in electronics sales over the holiday season. Sharon McCollam, CFO of Best Buy, forecasted in the report that the retailer expects “a negative low-single digit revenue growth rate” for the next quarter. Moreover, the retailer is anticipating its international revenue to decline approximately 30 percent due to foreign currency fluctuations and a slumping presence in the Canadian market.
Best Buy shares fell in early morning trading, but have since recovered to $31.01 as of mid-afternoon Wednesday.