Best Buy Co., Inc. (NYSE: BBY) has announced the consumer electronics retailer’s Q4 FY23 numbers as well as the company’s yearly financials. Despite better than expected sales numbers, Best Buy financial results reveal the company experienced a 9.3% drop in comparable sales with domestic revenue dropping 9.8% to $13.53 billion compared to last year’s $14.99 billion.
As a result of the current market conditions, the company told analysts it expects to close 20 to 30 brick-and-mortar store locations in the next fiscal year. Best Buy has already reduced its headcount by 25,000.
According to Best Buy, the largest drivers of this decline came from computing, home theater, electronic appliances and mobile phones. However, these losses, the company notes, were partially offset by the gaming and tablet categories. Regardless, the company’s stock has been slowly ticking down over the course of the week due to a fading industry outlook for consumer electronics.
“Today we are reporting Q4 sales that were in line with our expectations and profitability that was better than expected,” said Corie Barry, Best Buy CEO. “Throughout Q4 and FY23, we remained committed to balancing our near-term response to current conditions and managing well what is in our control, while also advancing our strategic initiatives and investing in areas important for our long-term performance.”
“We believe the macro and industry backdrop will continue to be pressured in FY24 and we will continue to adjust,” Barry added. “At the same time, we remain incredibly excited about our industry and our future – there are more technology products than ever in peoples’ homes, technology is increasingly a necessity in our lives, and technology innovation will continue.
“Our initiatives to deliver our omnichannel retail model evolution, build customer relationships through membership, and remove cost and improve efficiency and effectiveness will allow us to deliver even more experiences no one else can and capitalize on the opportunities ahead of us.”
Best Buy Predicts Further Sales Decline in FY24 Forecast
Following the company’s Q4 FY23 financial report, Matt Bilunas, Best Buy CFO, had this to say: “As we enter FY24, the consumer electronics industry continues to feel the effects of the broader macro environment and its impact on consumers,” said Matt Bilunas, Best Buy CFO. “As a result, our outlook assumes comparable sales decline 3% to 6% for the year, with the most sales pressure in the first quarter, as year-over-year comparisons ease through the year.”
“During FY24, we expect to expand our gross profit rate approximately 40 to 70 basis points versus the past year as we evolve our membership program and realize benefits from our cost optimization efforts,” Bilunas continued. “Non-GAAP SG&A expense is expected to increase versus last year as our cost takeout initiatives and lower variable costs are offset by the addback of incentive compensation, the extra week and higher depreciation.”
The company has set a revenue target of $43.8 billion to $45.2 billion for FY24.
