Best Buy shoppers on tight budgets scoured sales and hunted for low prices, eroding the company's sales and profits this summer.
On Tuesday, the Richfield-based electronics retailer said it earned $306 million in its second fiscal quarter that ended July 30, a 58% drop from a year ago. Executives last month lowered expectations for investors.
"We expected our financial results to be softer this year as we lapped some of the record sales volume that we have seen: however, the macroenvironment has been more challenged and certainly uneven than we had expected," Best Buy CEO Corie Barry said on a call with reporters.
Still, Wall Street expected worse. Best Buy's adjusted per-share profit of $1.54 came in above analysts' projection of $1.27. Revenue of $10.3 billion, while down about 13%, beat analysts' forecast of $10.2 billion.
Best Buy share prices rose 1.6% Tuesday.
"I think what you are seeing today is a little bit of relief from the investment community that things weren't worse," said Joe Feldman, a research analyst at Telsey Advisory Group.
A month ago, Best Buy executives said they expected comparable sales to decrease 13% from a previously forecast 8% decline. The new estimate was on target: Best Buy's comparable sales were down 12.1%. In last year's second quarter, comparable sales jumped almost 20% from the 2020 period.
Despite the dips, Best Buy's revenue is still better than what it was pre-pandemic, when revenue was $9.5 billion for the quarter.