Best Buy reported first-quarter results reflecting continued pressure in the consumer electronics market, with sales declining slightly compared to the same period last year.
Best Buy reported revenue of $8.767 billion and is now projecting annual revenue of between $41.2 billion and $41.9 billion for the full year. That is down from prior guidance of $41.4 billion to $42.2 billion.
For Q1, the retailer generated $8.13 billion in domestic revenue, down 0.9 per cent from the same period last year. The decline was primarily due to softer sales in home theatre, appliances and drones. International revenue was $640 million.
Despite domestic comparable sales dropping 0.7 per cent, online revenue grew 2.1 per cent and now accounts for nearly one-third of all sales.
CEO Corie Barry said the company delivered results in line with expectations despite a challenging backdrop.
“Our teams executed well despite ongoing macroeconomic uncertainty, delivering revenue in line with expectations and better-than-expected adjusted operating income,” he explains.
“We remain focused on our priorities, including improving the omnichannel experience, launching new profit streams and driving operational effectiveness.”
CFO Matt Bilunas added that the outlook assumes tariffs remain unchanged and no major shifts in consumer behavior.
“We expect annual comparable sales growth to range from down one per cent to up one per cent,” he said.
International revenue declined 0.6 per cent to $640 million. Lower product margins and supply chain costs weighed on the segment’s gross profit rate.
The company also recorded $109 million in restructuring charges related to its Best Buy Health division.
Neil Saunders, MD at data analytics firm GlobalData, said the modest sales decline shows that a recovery in electronics spending has yet to materialise.
“Higher interest rates and lower consumer confidence continue to weigh on big-ticket purchases,” he continued. “Unlike mass retailers such as Walmart or Amazon, Best Buy is more exposed to the electronics cycle and is struggling to capture consumer interest.”
He added that while Best Buy retains advantages in customer service and online operations, its stores need modernisation to stay competitive as tech companies enter the retail space.
Despite the current challenges, Barry says the company remains optimistic about its retail trajectory.
“Our team’s dedication and agility are critical as we navigate a dynamic environment and drive sustained growth,” the CEO concluded.
