Best Buy signals slowing sales of work-from-home electronics
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FILE PHOTO: A sign marks a Best Buy store at the upscale neighbourhood of Polanco, in Mexico City, Mexico, Mexico November 24, 2020. REUTERS/Henry Romero
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By Uday Sampath Kumar
(Reuters) - Best Buy Co Inc signaled a slowdown in the coronavirus crisis-driven demand for remote-work computer equipment on Thursday as it missed holiday-quarter sales estimates, sending its shares down 8%.
The rise of home offices and a shift to remote learning by schools raised demand for laptops, webcams, and other computer equipment last year, making Best Buy one of the bigger retail winners of the COVID-19 pandemic.
However, the consumer electronics retailer is unsure how the rollout of vaccines would affect consumer demand and shopping patterns, Chief Financial Officer Matt Bilunas said.
"There is a high level of uncertainty related to the impacts of the COVID-19 pandemic that makes it difficult to predict how sustainable these trends will be," he said.
Best Buy forecast full-year comparable sales to range between a fall of 2% and a rise of 1%, compared with analysts' estimates of a 1.6% increase, according to Refinitiv IBES data.
The company also said it would close over 20 large-format stores this year as it focuses more on sales through its website and app. It did not disclose how many employees will be impacted by the move.
The company is increasing its reliance on part-time employees, adding 2,000 positions after laying off about 5,000 mostly full-time workers this month. It reduced its total workforce by 17% in the last fiscal year.
Store traffic fell 15% in the fourth quarter due to a renewed surge in virus infections, while supply shortages of new gaming consoles and large appliances also hit the retailer's performance.
The company's comparable sales rose 12.6% in the quarter, missing expectations of a 14.4% increase.
Revenue rose 11.5% to $16.94 billion, but missed expectations of $17.23 billion. Adjusted profit was $3.48 per share, higher than estimates of $3.45 per share.
(Reporting by Uday Sampath in Bengaluru; Editing by Aditya Soni)
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