Best Buy (NYSE:BBY) reported disappointing third-quarter results, citing weakening consumer spending ahead of the U.S. presidential election and macroeconomic uncertainties. Revenue fell to $9.45 billion, missing analysts’ expectations of $9.63 billion, while adjusted earnings per share (EPS) came in at $1.26, lower than the $1.29 expected.
Comparable store sales fell 2.9% year over year, marking the 12th consecutive quarter of negative same-store sales growth for the retailer. The home appliances and entertainment categories saw significant declines of 14.7% and 18.8%, respectively, well below expectations. Consumer electronics sales fell 5.8%. However, IT and mobile grew 3.8%, while services revenue increased 6%, slightly beating estimates.
CEO Corie Barry attributed the weak performance to “continued macroeconomic uncertainty, customers waiting for deals and election distractions, particularly in non-core categories.” Despite these challenges, he noted promising early results from holiday promotions and Black Friday sales, with same-store sales expected in the fourth quarter to range from as low as 3%.
In response to the weak quarter, Best Buy revised its full-year forecast. Revenue is now expected between $41.1 billion and $41.5 billion, down from the previous range of $41.3 billion to $41.9 billion. Comparable sales are expected to decline 2.5% to 3.5%, more deeply than the previous forecast of a 1.5% to 3% decline.
The company also faces potential cost pressures from President-elect Donald Trump’s proposed tariffs on imports from China and Mexico, which could drive up prices of electronic products. Barry highlighted the impact on the consumer, saying: “Higher prices are not helpful… these are the goods people need.”
Best Buy shares fell 7% following the earnings announcement, but remain up 26.57% over the past year.