Best Buy reported better than expected revenue as sales declined in Q1
Yahoo Finance Live anchors discuss Best Buy earnings.
Video Transcript
JARED BLIKRE: And now time for Best Buy. And so their 2023 year forecast came up a bit shy of expectations. They're seeing revenue of $48.3 to $49.9 billion, whereas previously it was 50.7%.
A little bit better than feared on the first-quarter results. Enterprise comp sales down 8%. Street was expecting a little bit worse number, 9.44%.
And you just think about how retail has been shellacked, absolutely shellacked after those disappointing earnings that we got from Walmart and Target. We were talking about that a little bit ago.
Let's show the YFi Interactive one more time. This is a year-to-date chart, and we got some quotes here. And just taking a look at what has happened, and let's do the last five days in some of these markets. We're still seeing some outsized losses there. And so I'm thinking with this report, even though they missed on some key stats, maybe, just maybe Best Buy is a canary in the coal mine of itself, that we're not going to see any more outsized disappointments-- in other words, what was baked in after the Walmart earnings. Maybe the expectations had lowered so much because Best Buy itself is down 15% because of that last week. So maybe that cleared the way.
JULIE HYMAN: It could have cleared the way. Although, I mean, Best Buy, the initial positive reaction-- which I found somewhat surprising-- has now turned into a little more negative reaction, as we've been talking about. And you have to counterbalance some of the beats last quarter with the fact that they did indeed cut their forecasts.
I'm also interested in looking at the breakdown by product here and by channel, for that matter, as well. So for example, you mentioned the enterprise sales--
JARED BLIKRE: Right.
JULIE HYMAN: --which fell but fell less than estimated. International sales down much less than estimated, but entertainment sales down 13.6% on a comparable basis. That's worse. Appliance sales slowing down but still rising 2.9%. Computing and mobile sales off by 10 and 1/2%, and consumer electronics down 9.7%.
Now a lot of those numbers, even though they're down, they're not down as much--
JARED BLIKRE: Right.
JULIE HYMAN: --necessarily as the Street was estimating.
JARED BLIKRE: Appliances could be big here. Yeah, I'm glad you're focusing on this because up 2.9% when the Street was expecting a drop of 3%. Those are durable goods. We saw a slowdown earlier in the year with home-improvement products. You saw this reflected in Home Depot and Lowe's earnings.
So one number doesn't make a trend, but I'd say this is potentially good news. So I would be on the lookout for other signs that durables are improving, and that would actually speak as to the strength of the consumer, but that's just something I would watch out.
JULIE HYMAN: I'm also curious, as we talk about this, if somebody orders an appliance and that appliance is not coming for three months, does Best Buy book the sale when it arrives?
JARED BLIKRE: Isn't it like Tesla? It's deliveries, right?
JULIE HYMAN: Yeah, I think so.
JARED BLIKRE: I would think so.
JULIE HYMAN: So maybe that's something that is causing a little more inflation in the numbers because people had to wait--
JARED BLIKRE: Yes.
JULIE HYMAN: --to get their stuff.
