Best Buy (NYSE:BBY) said its third-quarter earnings soared past Wall Street’s expectations, but shares dropped Tuesday as the retailer warned of headwinds from higher shipping costs, inventory challenges and lower-margin holiday sales.
The retailer declined to provide an outlook for the fourth quarter — a significant period for electronics and tech purchases during the holidays — due to the uncertainty created by the coronavirus pandemic.
On a conference call, Chief Financial Officer Matt Bilunas said the company will have higher supply chain costs from parcel surcharges and will make less money because videogame consoles, a popular holiday gift, are lower margin.
Best Buy reported third-quarter net income of $391 million, or $1.48 per share, from $293 million, or $1.10 per share, a year earlier. Excluding items, it earned $2.06 per share, higher than the $1.70 per share expected by analysts.
Revenue rose to $11.85 billion from $9.76 billion a year earlier, which beat Wall Street’s expectations of $11 billion.
The company’s same-store sales grew by 23% overall. U.S. same-store sales were up 22.6% while they were 27.3% higher internationally.
Online revenue in the U.S. jumped by 174% to $3.82 billion in the quarter. It was the company’s second-best quarter for U.S. online revenue ever, even besting the company’s e-commerce sales during last holiday season.
Officials said the company is moving quickly to try approaches that can drive more sales, serve customers in different ways and run its online business more efficiently.
BBY shares docked $6.99, or 5.7%, to $115.09
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