Best Buy Stock Dips Pre-Market On Weak Q3 Earnings, Slashed Guidance: Retail Sentiment Hits Year’s Low
By Stocktwits Inc | First Published Nov 26, 2024, 8:08 PM ISTRevenue declined over 3% year-over-year (YoY) to $9.445 billion compared to an analyst estimate of $9.63 billion.
Shares of consumer electronics retailer Best Buy Co Inc ($BBY) were down nearly 2% in Tuesday’s pre-market session after the company reduced its full-year sales guidance and its third-quarter earnings failed to meet Wall Street expectations.
Revenue declined over 3% year-over-year (YoY) to $9.445 billion compared to an analyst estimate of $9.63 billion. Earnings per share (EPS) came in at $1.26 versus an estimated $1.29.
Net earnings rose nearly 4% YoY to $273 million during the quarter.
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For the full-year 2025, the company expects revenue of $41.1 billion to $41.5 billion, compared to a prior guidance of $41.3 billion to $41.9 billion. Comparable sales are expected to decline 2.5% to 3.5% versus a prior guidance of a decline of 1.5% to 3%.
According to management, the company witnessed a softer-than-expected demand in the second half of the quarter due to 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.
However, customer demand has picked up pace during the first few weeks of the fourth quarter as holiday sales began and the election concluded.
CEO Corie Barry said the firm continues to see consumers who are seeking value and sales events, and willing to spend on high price-point products when they need to or when there is new, compelling technology.
“Thus, we are balancing our optimism in both the industry and our unique positioning with a pragmatic approach to likely uneven customer behavior going forward,” Barry said.
During the third quarter, Best Buy’s domestic revenue fell 3.3% YoY to $8.70 billion primarily driven by a comparable sales decline of 2.8%.
The largest drivers of the comparable sales decline on a weighted basis were appliances, home theater and gaming, partially offset by growth in the computing, tablets and services categories.
International revenue declined 1.6% YoY to $748 million primarily driven by a comparable sales decline of 3.7% and the negative impact from foreign exchange rates.
Following the earnings release, retail sentiment on Stocktwits tumbled to a one-year low into the ‘extremely bearish’ territory (8/100) while retail chatter jumped to a year-high.
One Stocktwits user believes the stock could decline to sub-$70 levels in the short term.
For updates and corrections email newsroom[at]stocktwits[dot]com.<
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