Best Buy‘s third-quarter results beat Wall Street analysts’ estimates, but stocks fell as investors worried about rising shipping costs and weak demand for consumer electronics pushed the company’s stock down more than 15%.
The consumer electronics retail store has seen a jump in sales during the pandemic as Americans move to upgrade tech in their home offices, buy electrical appliances for kitchens, and invest in home theaters, and best Buy stated that it witnessed the continuation of these trends during the third quarter after the increase in its sales of these devices in addition to smartphones.
The company’s net income rose during the fiscal quarter ending on October 30 to 499 million dollars, or the equivalent of 2 dollars per share, after it was 391 million dollars, or 1.48 dollars per share, a year ago, excluding specific expenses, Best Buy earned $2.08 per share, beating analyst expectations of $1.91 per share, and net sales (revenue) grew from $11.85 billion a year ago to $11.91 billion, also beating expectations of $11.58 billion. The company continues its distinguished performance during the second quarter. Read More [Best Buy Shares Rise After Earnings Beat Expectations].
But analysts are concerned that Best Buy sales will decline as consumer spending shifts to areas such as travel and entertainment, which could force the retailer to offer more offers and discounts on laptops, smartphones and many other devices, ignoring continuing costs associated with supply chain disruptions.
The company raised its expectations for the full year slightly to reflect the strength of its results during the third quarter, as it sees that revenues will range between 51.8-52.3 billion dollars, compared to its previous aspirations, which ranged between 51-52 billion dollars, as for the fourth quarter, it expects to raise approximately $16.4-16.9 billion.