The Ratings Game: Best Buy joins list of retailers giving cautious outlook, citing pressure on consumer electronics

by | Mar 2, 2023 | Stock Market

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
stock fell 1.9% Thursday, outpacing the S&P 500’s
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. Related: Best Buy stock drops after quarterly profit and revenue beat expectations, but full-year outlook was below current forecasts 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. Now read: Target expects more retail price-cutting this year — and plans to sell more lower-priced items “[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 …

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