Best Buy shares close higher on Tuesday, company revises down full-year profit forecast due to inflation impact

Best Buy Co Inc (BBY) on Tuesday revised down its full-year earnings forecast, as it became another major US retailer to warn of an inflation impact.

Best Buy’s comparable sales shrank 8% year-on-year during the first quarter ended on April 30th, but outstripped market expectations of a 9.1% decline.

The company now expects a 3% to 6% drop in its full-year comparable sales, a revision down from a prior forecast of a 1% to 4% decrease.

“Macro conditions worsened since we provided our guidance in early March which resulted in our sales being slightly lower than our expectations. Those trends have continued into Q2 and, as a result, we are revising our sales and profitability expectations for the year,” Best Buy’s Chief Executive Officer Corie Barry said in a statement.

Excluding special items, Best Buy earned $1.57 per share, which compares with market consensus of $1.61 per share.

The electronics seller now forecasts fiscal 2023 adjusted earnings within the range of $8.40 to $9.00 per share, down from a prior forecast of $8.85 to $9.15 per share.

Best Buy shares closed higher for a second consecutive trading session in New York on Tuesday. It has also been the sharpest single-session gain since May 12th. The stock went up 1.21% ($0.88) to $73.47, after touching an intraday high at $75.89. The latter has been a price level not seen since May 19th ($76.42).

Shares of Best Buy Co Inc have retreated 27.69% so far in 2022 compared with a 17.30% loss for the benchmark index, S&P 500 (SPX).

In 2021, Best Buy’s stock went up 1.81%, thus, it again underperformed the S&P 500, which registered a 26.89% gain.