Best Buy Joins Retailers Seeing Declining Sales
NEW YORK (AP) — A strong start to the year from Best Buy 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 almost 6 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.
The Standard & Poor's 500 specialty retail index, which includes Best Buy, is down almost 2 percent this year. It would be worse if it weren't for a pair of retail standouts like Home Depot and Lowe's, which are thriving in a rebounding housing market.
The S&P multiline index, which follows companies like Macy's, Nordstom and Kohl's, is down 20 percent over the past 12 months.
For the three months ended April, Best Buy earned $229 million, or 70 cents per share. A year earlier the consumer electronics retailer 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. While the results beat the $8.29 billion that analysts expected, Best Buy's first-quarter revenue has now dropped for the past three years.
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 Richfield, Minnesota, company maintained its full-year guidance for approximately flat revenue.
Best Buy said Tuesday that Chief Administrative and Financial Officer Sharon McCollam will be stepping down in June. She will remain as an adviser to the company until the end of the fiscal year, on Jan. 28. Chief Strategic Growth Officer Corie Barry will become the chain's CFO at the end of Best Buy's annual shareholders meeting on June 14.
Shares of Best Buy, which are up 8 percent for the year, fell $1.79 to $31.20 before the opening bell.
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