Richfield, Minnesota-based Best Buy is reporting another quarterly drop in sales as Americans continue to tighten their purse strings on appliances and gadgets to focus on essentials.
The nation’s largest consumer electronics retailer lowered its annual sales and profit outlook, reporting earnings of $273 million, or $1.26 per share. That fell short of analyst expectations of $1.30 a share. The stock was down nearly nine percent in early trading Tuesday. That compares with $263 million, or $1.21 per share, a year ago.
Sales fell to $9.45 billion from $9.76 billion in the year-ago quarter.
Analysts expected earnings of $1.30 per share on sales of $9.63 billion, according to FactSet.
Comparable sales— those sales from online channels and physical stores — fell 2.9% in the quarter.
The company said that sales of appliances, home theater and gaming declined. That was partially offset by growth in the computing, tablets and services categories.
“During the second half of the quarter, a combination of the ongoing macro uncertainty, customers waiting for deals and sales events, and distraction during the run-up to the election, particularly in non-essential categories, led to softer-than-expected demand,” Best Buy’s CEO Corie Barry said in a statement.
However, Barry said that in the first few weeks of the fourth quarter, Best Buy has seen customer demand increase again as holiday sales have begun and the election is behind.
For Best Buy, the latest trends are a reversal from the height of the pandemic, when its sales were fueled by outsized spending from people splurging on electronics to help them work from home, or to get their children better equipped for virtual learning. Government stimulus checks also fueled spending.
To perk up sales, Best Buy has been modernizing its stores to entice shoppers and focus on its paid membership services. The company has been also reducing its layers of management and reinvesting in more labor at its stores to help shoppers.
Best Buy now expects annual sales in the range of $41.1 billion to $41.5 billion, down from prior guidance of $41.3 billion to $41.9 billion. Analysts anticipated $41.54 billion, according to FactSet analysts.
It now expects earnings per share to be in the range of $6.10 to $6.25, which compares to prior guidance of $6.10 to $6.35. Analysts expected $6.26 per share.
The Associated Press contributed to this story.