Employees bring a TV to Steve Steward’s car at a Best Buy store on Black Friday, traditionally one of the busiest shopping days of the year. Crowds are lower this year due to the growing popularity of online shopping amid concerns about the COVID-19 pandemic.
Paul Hennessy | Images SOUP | LightRocket | Getty Images
Best Buy said Thursday that it is preparing for a challenging dynamic in the next few months: rivals have lowered prices to try to keep pace with sales as the pandemic winds fade.
Chief Financial Officer Matt Bilunas said the company expects increased sales in the first quarter, but said profits could be weighted. Like Best Buy, he said, some other retailers will be compared to a large number because of their significant gains during the global health crisis.
“We anticipate more promotional pressure than we experienced last year as inventory becomes more available and competition is likely to increase,” he said in an appeal to investors and analysts.
Best Buy is one of the retailers that has seen sales increase as people were co-opted at home during the global health crisis. After being forced to work and learn from home, many consumers had to hurry to buy new computer monitors, printers and other tools. As they began to cook more, they sought and upgraded their appliances, while others turned to video games to pass the time. With higher demand and lower inventory, retailers, such as Best Buy items, are flying off the shelves – even without pushing buyers with tempting selling prices.
Pandemic-fueled demand began at Best Buy and other large stores, such as Walmart and Target, in the first quarter of last year, as people faced home orders and began stocking up on what they had. need, from food to technological equipment.
Sales growth accelerated at Best Buy in the coming months as the global health crisis intensified and consumers’ time at home extended. For Best Buy, sales growth peaked in the third fiscal quarter, which ended Oct. 31, as online and in-store sales for at least 14 months rose 23 percent.
Target also benefited as its doors remained open during spring lockouts – with strong sales of consumer electronics and fewer liquid goods on the shelf. Its chief financial officer, Michael Fiddelke, told investors and analysts that the reduction “sold a mix higher than the average for our units at regular prices.” He said he reduced the number of promotions to avoid increasing the number of stored stocks customers faced.
Best Buy exceeded Wall Street’s earnings expectations for the fourth quarter, but a slowdown in sales led to a sell-off on Thursday. Shares fell more than 8% on Thursday morning.
The retailer said it will face another wind, especially as people will return to pre-pandemic spending habits in the fall and winter. Bilunas said sales at the same store are expected to fall by up to 2% or increase by up to 1% for the fiscal year as consumers invest their money in meals or vacations, rather than buying a new laptop. or home theater.