Shares of Best Buy (NYSE:BBY) are down almost 3% in premarket trading Tuesday after the company slashed its FY revenue guidance.
BBY reported Q1 adjusted EPS of $1.57, compared to $2.23 in the year-ago period and missing the consensus estimates of $1.60 per share. Revenue came in at $10.65 billion, down 8.5% YoY and above the analyst consensus of $10.41 billion.
The gross margin stood at 22.1%, compared to 23.3% in the year-ago quarter and below the analyst estimates of 22.6%. Best Buy reported an 8% decline in enterprise comparable sales, up 37.2% YoY and compared to the estimated decline of 9.44%.
International comparable sales were down 1.4% in the period, up 27.8% YoY, while analysts were expecting a drop of 9.28%. BBY reported an 8.5% decline in US comparable sales, up 37.9% YoY, and compared to the expected drop of 9.28%.
“Macro conditions worsened since we provided our guidance in early March which resulted in our sales being slightly lower than our expectations,” the company said.
“Those trends have continued into Q2 and, as a result, we are revising our sales and profitability expectations for the year.”
For FY 2023, Best Buy expects adjusted EPS in the range of $8.40 to $9.00, down from the previous forecast range of $8.85 to $9.15, while analysts were expecting $8.94 per share. The retailer expects FY revenue in the range of $48.3 billion to $49.9 billion, down from $49.3 billion to $50.8 billion, and below the analyst expectations of $50.07 billion.
Enterprise comparable sales are expected to be down -3% to -6%, compared to the previous forecast of -1% to -4%, while analysts were looking for -2.55%.
Best Buy recently approved a new quarterly cash dividend of $0.88 per common share.
Vital Knowledge analysts said results were better than feared.
“The actual numbers we think are better-than-feared as WMT/TGT last week suggested an electronics environment that was even weaker than BBY is signaling,” Vital Knowledge founder Adam Crisafulli writes to clients.