Best Buy stock opened lower in US trading Tuesday despite record fiscal third-quarter earnings and a chief executive who was confident the consumer electronics retailer was up to supply chain challenges heading into the key year-end shopping season.
For the period ended 30 October, net income rose 28% to $499m (£373m) from $391m a year earlier on revenue which grew to $11.91bn from $11.85bn in 2020's third quarter.
Adjusted EPS was $2.08, up two cents from the $2.06 reported last year.
Analysts were expecting adjusted earnings of $1.95 per share on revenue of $11.65bn, according to figures widely available on financial news sites.
Stock down 15%
Best Buy shares opened at $116.00, down 16% from Monday’s close of $138.00.
On a conference call, CEO Corie Barry said that Best Buy was "confident" as it approached the key holiday shopping season.
"Our teams made strategic sourcing and inventory decisions early in the year to set us up well heading into the holidays. We are resourcefully adapting to the constantly evolving environment."
Domestic online revenue decreased 10.1% to $3.44bn on a comparable basis, and as a percentage of total domestic revenue, online revenue decreased to approximately 31.3% versus 35.2% last year.
15% more inventory
"We enter Q4 with 15% more inventory year-over-year and feel confident in our ability to serve our customers throughout the holiday," Best Buy's Barry said on the call.
For the current fourth quarter, the company sees revenue of $16.4bn to $16.9bn and comparable sales between a 2% drop and 1% growth.
For fiscal year 2022, Best Buy forecast revenue of $51.8bn to $52.3bn, up from its prior outlook of $51bn to $52.0bn. Comparable sales growth is seen at 10.5% to 11.5% compared to a prior outlook of 9% to 11% growth.
In the fiscal third-quarter, comparable sales rose 1.6% with domestic comparable sales up 2% while international comparable sales were down 3%.
Best Buy said international revenue decreased 7.8% versus last year's third quarter due to loss of revenue from exiting Mexico and a comparable sales decline of 3.0% in Canada.
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