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Best Buy Beats Earnings Estimates But Warns of Slowdown in Demand

The company said it was unsure how the rollout of vaccines would affect consumer demand and shopping patterns.

(Reuters) – Best Buy Co Inc signaled a slowdown in the coronavirus crisis-driven demand for remote-work computer equipment on Thursday as it missed holiday-quarter sales estimates, sending its shares down 6% in premarket trading.

More people setting up home offices and schools switching to remote learning pushed up demand for laptops, webcams, and other computer accessories last year, making Best Buy one of the bigger retail winners of the COVID-19 pandemic.

Best Buy Chief Financial Officer Matt Bilunas, however, said the company was unsure how the rollout of vaccines would affect consumer demand and shopping patterns.

“The demand for technology remains at elevated levels. However, there is a high level of uncertainty related to the impacts of the COVID-19 pandemic that makes it difficult to predict how sustainable these trends will be,” he said.

The consumer electronics retailer forecast full-year comparable sales growth between a fall of 2% and a rise of about 1%, below analysts’ estimates of a 1.6% increase, according to Refinitiv IBES data.

The company’s comparable sales rose 12.6% in the fourth quarter ended Jan. 30, missing expectations of a 14.4% increase. The sales growth was also slower than the 23% jump recorded in the third quarter.

Total revenue rose 11.5% to $16.94 billion, aided by demand for new gaming consoles from Sony Corp and Microsoft Corp. But the figure came in below expectations of about $17.23 billion.

Excluding one-time items, the company earned $3.48 per share, beating analysts’ estimates of $3.45 per share.

Reporting by Uday Sampath in Bengaluru; Editing by Aditya Soni.


Source: Reuters