Despite a disappointing holiday quarter, Best Buy reported falling sales, as the nation’s largest electronics chain struggled to meet demand for holiday products and was firced to reduce store hours due to a labor shortage due to omicron.
As anticipated by Wall Street, the Minneapolis-based chain reported profits on Thursday. In premarket trading, the shares gained close to 5% due to an upbeat long-term outlook.
As supply chain problems hit companies worldwide during the holiday season, Best Buy had to deal with higher labor and shipping costs. Additionally, the electronics chain had to deal with global chip shortages.
In addition to the typical holiday challenges, this past quarter also brought a contagious new variant, omicron, which forced many workers to take sick leave and forced some companies to reduce staff hours.
Although the supply chain challenges hindered some major retailers, Walmart and Target made strong sales despite the challenges.
Despite a constrained inventory of hot holiday items hurting sales, Best Buy CEO Corie Barry says the company delivered its products 25% faster than last year, setting a record for holiday delivery times.
Its earnings for the three months ended Jan. 29 declined to $626 million, or $2.73 per share, compared to $816 million, or $3.48 per share, in the year-earlier period.
A decrease of $16.36 billion was reported from $16.94 billion. The sales of domestic stores that have been open at least a year slumped 2.1% against a 12.4% growth rate in the prior quarter.
It projects revenue of $49.3 billion to $50.8 billion for the current fiscal year, with earnings per share ranging between $8.85 and $9.15. Among FactSet’s analysts, they expected $50.68 billion in revenue and earnings of $9.29 per share.
According to FactSet, analysts expect that the company will generate $53.5 billion for the fiscal 2025 year. However, the company expects its sales to be somewhere in the range of $53.5 billion to $56.5 billion.
The company focuses on investing in the future and on delivering long-term growth, according to Barie. She said the company expects revenue growth and operating income rate increases over fiscal 2025.