Best Buy adds to chorus of woes in retail
NEW YORK - A strong start to the year from Best Buy (BBY) was overshadowed by a lengthening string of declining quarterly sales and a pessimistic outlook that added to a chorus of woes from the retail sector.
The chain's shares dropped nearly 4 percent before the market opened Tuesday.
Last week, Target Corp. reported slowing quarterly sales and said that it could see more of the same in the current quarter. That would reverse almost two straight years of increases.
Others are seeing the same atrophying sales.
Before Target, Macy's Inc., J.C. Penney Co., Nordstrom Inc. and Kohl's Corp. all posted first-quarter sales declines as pressure increases from off-priced stores like T.J. Maxx and also online competition, namely Amazon.com.
For the three months ended April, the consumer electronics retailer earned $229 million, or 70 cents per share. A year earlier the Richfield, Minnesota, company earned $129 million, or 36 cents per share.
Earnings, adjusted for one-time gains and costs, came to 44 cents per share, easily topping the per-share projections of 35 cents from analysts surveyed by Zacks Investment Research.
Revenue fell to $8.44 billion from $8.56 billion, but managed to beat the $8.29 billion that analysts expected.
For the second quarter, Best Buy Co. foresees adjusted earnings between 38 cents and 42 cents per share. Analysts had been projecting 50 cents per share, according to a FactSet survey.
The company maintained its full-year guidance for approximately flat revenue.