Consumers are pulling back on discretionary goods, turning down the wattage on Best Buy’s (BBY) Q3 results.
Shares of the electronics retailer are lower in pre-market trading, down more than 4%, after the company posted mixed earnings results with net sales that came in lower than expected.
Consumers are under pressure from headwinds like higher interest rates, return of student loan payments, credit card debt, and dwindling savings.
Net sales came in at $9.76 billion, lower than the $9.90 billion expected. Sales of appliances, consumer electronics, computing and mobile phones all dropped, but the company saw strength in its entertainment products.
International sales saw a better-than-feared decline of 1.90%.
In the release, Best Buy CEO Corrie Barry said, “These results demonstrate our ongoing, strong operational execution as we navigate through the near-term sales pressure our industry has been experiencing for the past several quarters.”
She added, “In the more recent macro environment, consumer demand has been even more uneven and difficult to predict.”
The earnings breakdown:
Here’s what Best Buy reported, compared to Bloomberg consensus data:
Adjusted EPS: $1.29 versus $1.18 expected
Net sales: $9.76 billion versus $9.90 expected
Total US sales: -7.30% versus -5.98% expected
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Appliances: -15.30% versus -8.20% expected
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Entertainment: 20.60% versus 5.67% expected
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Consumer electronics: -9.50% versus -6.00% expected
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Computing and mobile phones: -8.30 versus -6.40% expected
International: -1.90% versus – 4.19% expected
The company also lowered its 2023 full year guidance. Revenue for the full year is now expected to come in between $43.1 billion to $43.7 billion, compared to prior guidance of $43.8 billion to $44.5 billion.
Sales are expected to see a decline of 6.0% to 7.5%, compared to the 4.5% to 6.0% decline previously expected.
CEO Barry said in the release that the company is looking forward to the holiday season with a different consumer in focus.
“[Best Buy is] prepared for a customer who is very deal-focused with promotions and deals for all budgets, new shopping experiences, an expanded product assortment, and fast and free fulfillment, she said.
This story is breaking and being updated.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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