Best Buy's profit in the first quarter exceeded expectations! Weak demand will bottom out before the end of the year!

AMZ23 learned that on May 25, Best Buy reported a smaller-than-expected decline in comparable sales in the first quarter and said that inflation-driven weakness in electronics should bottom out by the end of the year, pushing the stock price of the top U.S. electronics retailer up 4%.

The company beat first-quarter profit expectations and also maintained its full-year profit and revenue forecasts. Best Buy joins Home Depot and Target Corp in beating first-quarter profit expectations as Americans cut back on non-consumer spending due to inflation.

Deep discounts have helped discretionary retailers attract budget-conscious customers looking to buy televisions and laptops, among other big-ticket items, at cheaper prices.

Best Buy’s adjusted net income for the quarter ended April was $1.15 per share, topping analysts’ average estimate of $1.11 per share, according to IBES data from Refinitiv.

The discounts helped Best Buy limit its first-quarter comparable sales decline to 10.1%, compared with analysts’ average estimate of a 10.3% decline. Second-quarter comparable sales are expected to fall a smaller 6% to 8% compared with the previous quarter.

"As clients continue to grapple with high inflation, they are clearly feeling cautious and making weighing decisions," said chief executive Corie Barry.

It is learned that the company's stock price has fallen nearly 14% so far this year amid the turbulent macro and consumer industry backdrop.

Chief Financial Officer Matthew Bilunas said: "We expect the macro environment to continue to put pressure on demand in our industry this year. However, we expect that comparable sales performance will improve in the later period."

Editor ✎Estella/

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