Best Buy Co. joined the list of retailers delivering a cautious outlook when the company reported its fourth-quarter results before market open Thursday.
While profit and revenue beat expectations, the company’s full-year outlook was below forecasts, echoing a broader trend in the retail sector. Best Buy’s
BBY,
stock fell 1.9% Thursday, outpacing the S&P 500’s
SPX,
decline of 0.1%.
“As we enter [fiscal year 2024], the consumer electronics industry continues to feel the effects of the broader macro environment and its impact on consumers,” Best Buy CFO Matt Bilunas said in a statement Thursday.
Domestically, Best Buy’s consumer-electronics same-store sales fell 11.8%. Consumer-electronics same-store sales fell 10.1% in the company’s international segment.
“Like many retailers, [Best Buy] gave a cautious 2023 outlook, which seems warranted given the continued pressure on consumer electronics, with the company expecting another year of negative comps and lower operating margins,” D.A. Davidson analyst Michael Baker wrote in a note released Thursday. However, D.A. Davidson maintained its buy rating for Best Buy. “We believe much of the pressures in consumer electronics are priced into the current multiple,” Baker wrote.
D.A. Davidson also maintained its $99 price target for Best Buy.
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“[Fourth-quarter] results were mixed, with in-line comps (although buyside hoped for better), better-than-expected margins; but below-Street [fiscal year 2024] outlook,” wrote Wells Fargo analyst Zachary Fadem in a note released Thursday. Citing early first-quarter trends and Best Buy’s outlook, Wells Fargo reduced its fiscal year 2024 earnings-per-share estimate for the retailer to $6.20 from $6.95 and its fiscal year 2025 estimate to $7.05 from $7.75.
Wells Fargo has an equal-weight rating for Best Buy.
Earlier this week, retail giant Target Corp.
TGT,
reported fourth-quarter results that beat forecasts, although the company’s first-quarter and full-year profit forecasts came in below expectations. Last week Walmart Inc.
WMT,
beat on fourth-quarter earnings and sales but gave a weaker-than-expected fiscal 2024 earnings outlook.
Of 30 analysts surveyed by FactSet, five have an overweight or buy rating, 22 have a hold rating and three have an underweight or sell rating for Best Buy.
