Best Buy comparable third-quarter sales declined 6%

GaryPageau
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Best Buy Co., Inc. announced results for the 13-week third quarter ended Oct. 28, 2023, as compared to the 13-week third quarter ended Oct. 29, 2022.

Q3 FY24  Q3 FY23
Revenue ($ in millions)
Enterprise $9,756 $10,587
Domestic segment $8,996 $9,800
International segment $760 $787
Enterprise comparable sales % change1 (6.9)% (10.4)%
Domestic comparable sales % change1 (7.3)% (10.5)%
Domestic comparable online sales % change1 (9.3)% (11.6)%
International comparable sales % change1 (1.9)% (9.3)%
Operating Income
GAAP operating income as a % of revenue 3.6% 3.4%
Non-GAAP operating income as a % of revenue 3.8% 3.9%
Diluted Earnings per Share (“EPS”)
GAAP diluted EPS $1.21 $1.22
Non-GAAP diluted EPS $1.29 $1.38

“Today we are reporting better-than-expected profitability on slightly softer-than-expected revenue for the third quarter,” said Corie Barry, Best Buy CEO. “These results demonstrate our ongoing, strong operational execution as we navigate through the near-term sales pressure our industry has been experiencing for the past several quarters.”

Corie Barry, Best Buy CEO

Barry continued, “In the more recent macro environment, consumer demand has been even more uneven and difficult to predict. Based on the sales trends in Q3 and so far in November, we believe it is prudent to lower our annual revenue outlook. The midpoint of our annual non-GAAP diluted EPS guidance is slightly higher than the midpoint of our original guidance as we entered the year.”

“We are excited for the important holiday season and are prepared for a customer who is very deal-focused with promotions and deals for all budgets, new shopping experiences, an expanded product assortment, and fast and free fulfillment,” continued Barry. “I want to thank our associates for their resilience, determination, and relentless focus on our customers. I continue to be very proud of the way our teams are managing the business today and preparing for our future.”

Best Buy CFO Matt Bilunas said, “For the fourth quarter, we expect our comparable sales to decline in the range of 3.0% to 7.0%. On the profitability side, we expect our Q4 FY24 non-GAAP operating income rate to be in a range of 4.7% to 5.0%, which compares to a rate of 4.8% last year.”

Domestic revenue of $9.00 billion decreased 8.2% versus last year primarily driven by a comparable sales decline of 7.3%.

From a merchandising perspective, the largest drivers of the comparable sales decline on a weighted basis were appliances, computing, home theater and mobile phones. These drivers were partially offset by growth in gaming.

Best Buy’s guidance for FY24, which includes 53 weeks, is the following:

  • Revenue of $43.1 billion to $43.7 billion, which compares to prior guidance of $43.8 billion to $44.5 billion
  • Comparable sales decline of 6.0% to 7.5%, which compares to prior guidance of a decline of 4.5% to 6.0%
  • Enterprise non-GAAP operating income rate2 of 4.0% to 4.1%, which compares to prior guidance of 3.9% to 4.1%
  • Non-GAAP effective income tax rate2 of approximately 24.0%, which compares to prior guidance of approximately 24.5%
  • Non-GAAP diluted EPS2 of $6.00 to $6.30, which compares to prior guidance of $6.00 to $6.40
  • Capital expenditures of approximately $825 million, which compares to prior guidance of approximately $850 million