Best Buy cuts forecast for fiscal year, citing weaker demand

Best Buy on Wednesday cut its forecast for the year and the second quarter, saying it has seen weaker demand for consumer electronics amid inflation.

Shares recovered after initially dropping more than 10% following the announcement.

The consumer electronics retailer said it now expects same-store sales to decline about 13% for the second quarter. That’s lower than it said in May, when it predicted it would be roughly in line with the first quarter when it dropped by 8%.

For the fiscal year, Best Buy said it expects same-store sales to decline around 11%, compared with the drop of between 3% and 6% that it forecast in May.

The company said in a news release that “in response to the current sales environment, the company will continue to actively assess further actions to manage profitability.”

CEO Corie Barry said the company expected sales to slow as it laps a period of unusually high demand, but she said the economic backdrop has become more challenging.

“As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further, leading to Q2 financial results below the expectations we shared in May,” she said in a news release.

Yet she added that its sales are higher than before the pandemic, emphasizing the company’s strong position even in a turbulent time.

This story is developing. Please check back for updates.