With consumers no longer stuck at home, buying sprees for electronics have ended, which led Best Buy Co.'s sales to drop in the first part of this year.
Executives at the Richfield electronics retailer say they expect to continue to see lower profits as part of a projected long-term slowdown in the coming year.
Best Buy executives had already anticipated earnings would decline in February through April as the electronics seller lapped strong periods of growth during the the pandemic.
Although the latest sales exceeded analysts' expectations, the same inflationary pressures that have driven up costs for retailers such as Walmart and Target also have caused a slightly bigger hit than expected on Best Buy's bottom line.
The company said it earned $341 million, down 43% from $595 million in the same period a year ago. That amounted to an adjusted per-share profit of $1.57, below the $1.61 forecast of analysts surveyed by Reuters.
Revenue fell 9% to $10.6 billion — still better than the consensus forecast of analysts of $10.4 billion.
"Even with the expected slowdown this year as we lap two-plus years of pandemic impacts, we continue to be in a fundamentally stronger position than we expected to be at this point," Best Buy CEO Corie Barry said during a call with analysts Tuesday morning.
"We are confident in the strength of our business and excited about what lies ahead."