NEW YORK – Best Buy Co. posted first-quarter results that showed shoppers pulled back on spending, while higher costs ate into profits.
The country's largest consumer electronics chain also cut its annual outlook, noting a deteriorating macroeconomic environment.
Best Buy was among a handful of big winners in the pandemic, as shoppers splurged on tech equipment such as laptops to create home offices to help them with remote work or cater to the needs of their children for virtual learning.
But like many retailers, it is struggling with rising costs for everything from labor to shipping. The electronics chain also had to navigate global chip shortages. Another round of COVID-19 lockdowns in China is only worsening the problem. And soaring fuel costs and the return of promotions are hurting the bottom line.
Meanwhile, Best Buy, like other retailers, is also adjusting to changing shopping behavior. Demand for electronics is cooling as consumers go back to the office and resume normal lives.
Inflation is also making shoppers scrutinize their purchases. In particular, CEO Corie Barry told reporters on a call Tuesday that purchases by lower-income shoppers, who were new Best Buy customers during the pandemic, have recently fallen off.
Best Buy, based in Richfield, Minnesota, reported fiscal first-quarter net income of $341 million, or $1.49 per share. Earnings, adjusted for amortization costs and restructuring costs, came to $1.57 per share.
Best Buy shares have declined 29% since the beginning of the year, while the S&P's 500 index has fallen 17%. Shares slipped 88 cents, to $73.47, on Tuesday.