- Best Buy on Wednesday cut its forecast for the year and the second quarter, citing weaker demand as consumers feel pressure from inflation.
- The retailer said it expects same-store sales to decline around 11% for the fiscal year, compared with the drop of between 3% and 6% that it forecast in May.
- CEO Corie Barry, however, emphasized that sales are higher than pre-pandemic levels and the company is in a strong position despite a more challenging economic backdrop.
on Wednesday cut its forecast for its fiscal year and second quarter, saying it has seen weaker demand for consumer electronics amid inflation.
The consumer electronics retailer said it now expects same-store sales to decline about 13% for the current three-month period, which ends Saturday. That's lower than what Best Buy said in May, when it predicted comparable sales would be roughly in line with the 8% decline in the first quarter.
For the 12-month period that ends in late January, Best Buy said it expects same-store sales to decline around 11% compared with the drop of between 3% and 6% that it forecast in May.
Best Buy said it will pause share buybacks, but will continue to pay its quarterly dividend. It also said in a news release that it "will continue to actively assess further actions to manage profitability." The company did not immediately respond to a request for details about those potential steps.
With Wednesday's announcement, Best Buy joins
At that time, CEO Corie Barry said consumers were "pulling back at a faster, deeper pace than we had initially assumed" as they spent money on experiences or became more budget-conscious as food and gas prices rose.
On Wednesday, Barry said the economic backdrop has become more challenging.
"As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further, leading to Q2 financial results below the expectations we shared in May," she said in a news release.
Yet Barry added that its sales are higher than before the pandemic, emphasizing the company's strong position even in a turbulent time.
The company has chased new growth opportunities, such as adding merchandise like exercise equipment, electric bikes and high-tech beauty gadgets, and has launched Totaltech, a subscription program that includes perks like tech support and extended warranties.
Best Buy's announcement comes after