Best Buy (BBY) is set to report its Q3 results Tuesday before market open as demand for electronics continues to stabilize post pandemic.
Wall Street expects revenue to come in at $9.63 billion, a touch lower compared to Q3 of last year, while adjusted earnings are estimated to be flat year over year at $1.29 per share. Same-store sales are expected to fall nearly 1% for the quarter, compared to the 7.30% drop seen this time last year.
Analysts anticipate appliance sales will continue to drag down results, followed by entertainment and consumer electronics. Computing and mobile phones are likely to see a gain.
“We expect computing (notebooks & tablets) & services to partly offset softness in appliances and home theater,” Bank of America analyst Robby Ohmes wrote in a note to clients.
Preliminary credit and debit card data “suggests a comparable sales growth slowdown in October… as value-conscious consumers may have chosen to delay purchases and wait for Holiday sales,” Ohmes added.
In the prior quarterly results, CEO Corie Barry said customers are “seeking value and sales events” but are “willing to spend on high-price-point products” for new technology.
Best Buy shares are up nearly 19% year-to-date, trailing behind the S&P 500’s (^GSPC) nearly 25% gain.
New products, particularly surrounding AI, could boost growth.
“The company should see a return to growth in the first half of 2025, following many consecutive quarters of negative comps, as newness and the replacement cycle kicks in, especially for products purchased in 2019-2020,” Telsey Advisory Group Joe Feldman wrote in a note to clients.
Copilot+ PCs, which are capable of accessing advanced AI models, launched earlier this year with roughly 40 products. In the previous quarter, Barry said the company is the exclusive retailer for about 40% of those new PCs.
He previously said in the second half of 2024, Best Buy will see a much larger percentage of computers and tablets with AI capabilities, and more AI products available at various price points.
Here’s what Wall Street expects Best Buy to post for Q3, compared to a year ago, per Bloomberg consensus data:
Adjusted earnings per share: $1.29 versus $1.29
Net sales: $9.63 billion, versus $9.76 billion
Same-store sales growth overall: -0.92%, versus -7.30%
Total US same-store sales growth: -0.74%, versus -7.30%
Sales growth for:
-
Appliances: -7.50%, versus -15.10%
-
Entertainment: -4.00%, versus 20.60%
-
Consumer electronics: -2.72%, versus -9.50%
-
Computing and mobile phones: +3.50%, versus -8.30%
-
Services: +5.83%, versus 6.90%