Best Buy (NYSE: BBY) has reported disappointing third-quarter results, citing weakened consumer spending ahead of the US presidential election and macroeconomic uncertainties. Revenue fell to US$9.45bn, missing analysts' expectations of US$9.63bn, while adjusted earnings per share (EPS) came in at US$1.26, short of the projected US$1.29.
Comparable store sales declined by 2.9% year-over-year, marking the retailer's 12th consecutive quarter of negative same-store sales growth. Appliances and entertainment categories saw significant drops of 14.7% and 18.8%, respectively, well below expectations. Consumer electronics sales fell 5.8%. However, computing and mobile phones grew 3.8%, and services revenue increased by 6%, slightly beating estimates.
CEO Corie Barry attributed the weak performance to "ongoing macro uncertainty, customers waiting for deals, and election distractions, particularly in nonessential categories". Despite these challenges, she noted promising early results from holiday promotions and Black Friday sales, with fourth-quarter same-store sales expected to range from flat to a 3% decline.
In response to the soft quarter, Best Buy revised its full-year forecast. Revenue is now projected between US$41.1bn and US$41.5bn, down from the earlier range of US$41.3bn to US$41.9bn. Comparable sales are expected to decline 2.5% to 3.5%, deeper than the previous forecast of a 1.5% to 3% drop.
The company also faces potential cost pressures from President-elect Donald Trump’s proposed tariffs on imports from China and Mexico, which could drive up prices on electronics. Barry highlighted the impact on the consumer, saying, "Higher prices are not helpful… these are the goods that people need."
Shares of Best Buy fell 7% following the earnings announcement but remain up 26.57% over the past year.
