Appliance retailer Best Buy has recorded a decline in domestic revenue of 3.3 per cent to $8.7 billion during the third quarter ending November 2.
The most significant declines were seen in appliances, home theater, and gaming, though these were partially offset by growth in computing, tablets, and services.
Meanwhile, online revenue reached $2.73 billion, representing 31.4 per cent of total domestic revenue, a slight increase from 30.6 per cent in the same quarter last year. Online sales decreased by 1 per cent on a comparable basis.
International revenue decreased 1.6 per cent year-over-year to $748 million, impacted by a 3.7 per cent decline in comparable sales and unfavorable foreign exchange rates.
While Best Buy faced softer-than-expected demand during the quarter, CEO Corie Barry said the company remains optimistic about the holiday season as customer activity begins to pick up.
She attributed the decline in demand to ongoing macroeconomic uncertainty, customers holding off for deals and sales events, and distractions leading up to the election, especially in non-essential categories.
“In the first few weeks of Q4, as holiday sales have begun and the election is behind us, we have seen customer demand increase again,” Barry noted.
This increase was attributed to more robust service performance, including membership offerings, though it was partially offset by lower profit-sharing from private-label credit cards and reduced product margins.
Outside the US, revenue from newly opened Best Buy Express locations in Canada provided some offset.
Best Buy revised its FY25 revenue guidance to $41.1 billion to $41.5 billion, slightly narrowing its earlier projection of $41.3 billion to $41.9 billion. Comparable sales are now expected to decline by 3.5 per cent to 2.5 per cent, compared to the prior forecast of a 3.0 per cent to 1.5 per cent drop.
As the holiday season kicks off, Barry expressed confidence in its ability to attract customers with competitive deals, engaging in-store and online merchandising, and robust fulfilment options.
“We are balancing our optimism in the industry and our unique positioning with a pragmatic approach to likely uneven customer behavior going forward,” the CEO concluded.
