US stock markets: Best Buy shares soar nearly 8.1% on smaller-than-expected fall in Q4 sales

Shares of Best Buy Co. soared nearly as much as 8.1 per cent on Thursday as the consumer electronics retailer posted a smaller-than-expected sales decline in the fiscal fourth quarter ended February 3. The quarter ran through early February and included the holiday season.

The Richfield, Minneapolis-based company reported sales at $14.65 billion for the quarter, down from the $14.73 billion a year ago.

Its net income stood at $460 million, or $2.12 per share, in the fourth quarter as compared to a profit of $495 million, or $2.23 per share, in the year-ago period.

Its adjusted per share results stood at $2.12, below the analysts’ expectations.

Comparable sales — business from its stores and its online channels — fell 4.8 per cent in the quarter, an improvement from the 6.9 per cent drop in the previous quarter.

Best Buy said it expects sales for the current fiscal year to be in the range of $41.3 billion to $42.6 billion.

Best Buy shares rose $3.70 to $83.38 in morning trading on Thursday.

The current economic environment makes consumer electronic sales uneven and difficult to predict, said Best Buy.

“As our industry returns to growth, we expect to grow our sales and expand our operating income,” Best Buy chief executive officer (CEO) Corie Barry said

“We remain confident that our industry will grow again after two years of declines,” Corie Barry also said.

Best Buy anticipates earnings per share for the year to range from $5.75 per share to $6.20 per share.

To boost sales, the company is planning to freshen up its stores and focus on its paid membership services, which is resonating with its customers, and on further personalizing the shopping experience, like the smartphone app’s homepage.

The retailer expects sales of computing products to improve through the year and show growth, as consumers turn to newer products like those featuring artificial intelligence.

Innovation in consumer electronics products slowed due to supply-chain constraints during the pandemic and is returning to a more normalized pace, Barry said.

During the holiday season, shoppers were deal-driven in a environment that was even more promotional than before the pandemic, said Best Buy.