Best Buy Co. BBY 3.77% ’s sales for the holiday quarter fell from a year earlier, as reduced store hours due to labor shortages caused by the Omicron variant and supply-chain challenges disrupted operations.
The electronics retailer saw sales fall to $16.37 billion in the three months ended Jan. 29, down from $16.94 billion a year ago, when homebound consumers splurged on televisions and other electronics. Analysts surveyed by FactSet were looking for $16.59 billion in quarterly sales.
“Q4 sales of $16.4 billion were impacted by more constrained inventory than expected, including some high-demand holiday items, and the temporary reduction in store hours in January due to Omicron-induced staffing challenges,” Chief Executive Corie Barry said Thursday in a news release.
The company said U.S. sales fell 2.6%, as sales in gaming, mobile phones, tablets and services all fell, offsetting gains in appliances, virtual reality, home theater and headphones.
The company previously warned that sales in the holiday period may take a hit as customers looked to shop early for the December holidays amid warnings of the snarled global supply chain. As a result, some holiday sales were likely pulled forward into October, taking away from the fourth quarter, Chief Financial Officer Matt Bilunas warned in November.
U.S. online sales fell 11.2% compared with a year earlier, the company said.
The company has seen e-commerce sales decline this year after a pandemic-driven boom in 2020, when temporary store closures pushed many customers to shop online. The trend has helped Best Buy reduce costs by eliminating some home-delivery expenses amid surging transportation and labor costs.
Overall, consumer demand has been strong as Americans continue to spend despite rising prices and global supply-chain snarls. Consumers spent nearly $650 billion in U.S. retail stores and restaurants in January, compared with about $504 billion in January 2019, according to government data.
Best Buy also said it expects sales to fall in fiscal 2023, the retailer’s current year. It forecast sales of between $49.3 billion and $50.8 billion, compared with $51.76 billion in fiscal 2022. Best Buy said it expects same-store sales to fall between 1% and 4% in the year ahead.
The company said it expects adjusted earnings of between $8.85 a share and $9.15 a share in the year ahead, below the $10.01 a share the company posted in fiscal 2022.
The company also said it is raising its quarterly dividend by 26% to 88 cents a share. Best Buy said it plans to spend about $1.5 billion in share repurchases in fiscal 2023, which is the company’s current year.
The company posted net income of $626 million for the quarter, compared with $816 million a year earlier. Earnings were $2.62 a share, compared with $3.10 a share in the year-ago period.
Adjusted earnings were $2.73 a share. Analysts surveyed by FactSet were expecting $2.72 a share.
The stock rose more than 3% in premarket trading to $104.42 a share.
Write to Will Feuer at [email protected]
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