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• Best Buy net sales rose to $11.91 billion from $11.85 billion a year earlier
• Shares of the company tumbled more than 15% on Tuesday
Best Buy Co Inc beats third-quarter earnings estimates on Tuesday, but its shares tumbled more than 15%, indicating investors’ worry due to shortages of electronic products.
The consumer electronics retailer’s net sales rose to $11.91 billion from $11.85 billion a year earlier, topping estimates of $11.58 billion.
During the coronavirus pandemic, sales of Best Buy climbed due to increased demand of tech devices, appliances and smartphones. Best Buy said demand of home theatres and appliances boosted sales in the third-quarter.
The company earned, excluding items, $2.08 per share, higher than the analysts’ expectations of $1.91 per share, according to Refinitiv.
Worried investors
The investors are however concerned that the retailer’s sales could be affected due to rising shipping costs and weakened consumer demand.
Chief Executive Officer Corie Barry also said that the company is facing supply constraints in categories such as appliances.
Tech companies such as Sony Corp and Microsoft have been struggling to keep their latest gaming consoles in stock due to the global chip shortage. Some analysts have also warned of short supply of latest iPhones during the holiday season.
Shortage of these devices could be disappointment for Best Buy as they are major attractions for customers in the holiday season.
Company’s forecast
Reflecting the third-quarter sales, Best Buy raised revenue forecast for the year between $51.8 billion to $52.3 billion, compared to prior forecast of $51 billion to $52 billion.
The company expects same-store sales growth of 10.5% to 11.5% for the year.
The retailer expects revenue of $16.4 billion to $16.9 billion in the fourth quarter and same-store sales in the range of 1% growth to 2% decline, the midpoint of which was below estimates of a 0.1% rise, according to Refinitiv data.
Picture Credits: Reuters