- Best Buy posts £7 billion in revenue and 54.7 pence of adjusted earnings per share in Q1.
- The U.S retailer cites Coronavirus uncertainty for not giving full-year or Q2 guidance.
- The consumer electronics retailer sees a 154.4% year over year increase in its online sales.
Best Buy (NYSE: BBY) released its quarterly financial results on Thursday that posted a decline in earnings and revenue in Q1. The company said that sales were upbeat initially as customers rushed to shop ahead of the Coronavirus lockdown. Later on, however, its financial performance took a hit as the pandemic pushed its stores into temporarily shutting down.
Best Buy also suspended in-home repairs or installations amidst the pandemic. Shares of the company were reported about 2% down in premarket trading on Thursday. At £67 per share, the retailer is roughly 5% down year to date in the stock market. In April, Best Buy furloughed 51,000 employees to shore up finances amidst the health crisis.
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The U.S retailer already withdrew its financial guidance for fiscal 2021 in mid-March. CFO Matt Bilunas cited the rising COVID-19 uncertainty on Thursday as the company refrained from giving full-year or Q2 guidance. Best Buy suspended its share repurchase programme and drew down completely from its £1.02 billion revolving credit line.
As per Telsey Advisory Group, however, Best Buy has the potential to come out of the Coronavirus pandemic as a winner in retail.
Best Buy’s Q1 financial results versus analysts’ estimates
According to Refinitiv, experts had forecast the company to print £6.67 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at 36 pence per share. In its report on Thursday, Best Buy fell short of both estimates recording a higher £7 billion in revenue and 54.7 pence of adjusted earnings per share in the recent quarter.
In the same quarter last year, the American multinational consumer electronics retailer had registered a higher £7.69 billion in revenue. At £130 million, Best Buy’s net income in Q1 also came in lower than £216.68 million in the comparable quarter of last year.
Best Buy posts a 5.3% decline in same-store sales
Analysts had also anticipated a 10% drop in the retailer’s same-store sales. In comparison, Best Buy only reported a 5.3% decline in its comparable-store sales in the first quarter on Thursday. The company saw a 5.7% decline in same-store sales in the U.S and a marginal 0.2% decline internationally.
As Coronavirus restricted people to their homes, Best Buy noted a 154.4% year over year increase in its online sales.
The Coronavirus driven downward rally pushed Best Buy’s stock down to £41.45 per share in late March. The Richfield-headquartered retailer performed largely upbeat in 2019 with an annual gain of about 70%.
At the time of writing, Best Buy has a market cap of £17.17 billion and a price to earnings ratio of 14.19.