NEW YORK (AP) — Best Buy reported another quarterly drop in sales as the nation's largest consumer electronics chain wrestles with cautious spending by Americans as they prioritize essential purchases and pay more for things like rent.
The company has reported quarterly sales declines for more than two years, a stretch reaching back to the pandemic when households were bulking up on new laptops and other goods to work from home.
Sales were worse than Wall Street had expected, but profits were better than projected. Best Buy offered a muted profit and sales outlook for the year.
Shares rose more than 1% in premarket trading Thursday.
The U.S. job market has remained strong, but Americans are paying more for necessities like rent. Inflation appears to have begun to cool overall. Still, Americans are paying more when they use credit cards because interest rates are higher, leading many to put off big ticket purchases like appliances and other goods typically bought using credit.
That is a reversal of what Best Buy's customers were doing during the pandemic, when its sales were being fueled by oversized spending from workers splurged on electronics to help them work from home, or to get their children better equipped for virtual learning. Government stimulus checks fueled a lot of that spending as well.
Best Buy plans to modernize stores to entice shoppers and focus on its paid membership services that have resonated with its customers.
Best Buy reported a profit of $246 million, or $1.13 per share for the quarter ended May 4. That compares with a profit of $244 million, or $1.11 per share in the year-ago period. Adjusted earnings per share was $1.20, easily topping Wall Street expectations for $1.08, according to a poll by FactSet.
Sales fell to $8.85 billion, from $9.46 billion, and wre short of the $8.96 billion that industry analysts had expected.
Comparable sales — those from established online and physical store channels — dropped 6.1%.
Best Buy anticipates earnings per share for the year ranging from $5.75 per share to $6.20 per share. Analysts have been projecting earnings of $6.04 per share.
Best Buy expects revenue in the range of $41.3 billion to $42.6 billion for the year. Analysts are expecting $41.94 billion, according to FactSet.
