Best Buy (NYSE: BBY) reported better than expected second-quarter earnings despite highlighting a 13% drop in sales within the same time period. The plummet in sales comes amid rising inflation concerns from shoppers. Nevertheless, the company’s shares rose 6% during early morning trading amid the news.
The multinational consumer electronics retailer reported earnings of USD1.54 per share, compared to the expected USD1.27 a share. Revenue amounted to USD10.33 Billion, higher than analysts anticipated USD10.24 Billion. However, the company’s net income fell to USD306 Million, or USD1.35 per share, compared to the previous year’s USD734 Million or USD2.90 per share.
“We are clearly operating in an uneven sales environment,” Chief Executive Corie Barry said in a news release. “As we entered the year, we expected the consumer electronics industry to be softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by stimulus dollars. The macro-environment has been more challenged due to several factors and that has put additional pressure on our industry.”
The quarter demonstrates a clear change in consumer behavior and spending habits. A year ago the retailer experienced a 20% increase in sales as people purchased TVs, laptops, and other merchandise to set up their new work-from-home lifestyle. Nevertheless, the pattern has now faded as people return to the office and begin to travel once again.
Barry continued, “We are focused on balancing our near-term response to difficult conditions and managing well what is in our control, while also delivering on our strategic initiatives and what will be important for our long-term growth. This includes actively assessing further actions to evolve our operating model, manage profitability and iterate on our growth initiatives. Our strategy, and our confidence in it, remains unchanged. We have exciting opportunities ahead of us in a world that is more reliant on technology than ever. We are a financially strong company with a resilient, world-class team that will successfully navigate the current environment.”