Shares of the consumer electronics retailer rose 2% in pre-market trading as second-quarter earnings handily beat consensus estimates.
Considering Best Buy's cautious tone on the business back in its May earnings release, and the negative reads on big-ticket consumer spending since, the analyst community wasn't expecting much from the company's results.But dig beneath the surface, and you will see a retailer still struggling with the new consumer environment of higher interest rates and pesky inflation.
The company said Tuesday it saw sizeable sales declines in key departments such as mobile phones, consumer electronics and appliances. While it called out an improvement in the low end of its full-year EPS guidance versus that several months back, it still trimmed the top end — a nod to possible holiday spending softness.
Moreover, its third-quarter sales guidance suggests the back-to-school electronics shopping season has started on a slow note. "Our financial results were better than expected, and they reflect a consumer electronics industry that remains challenged due to the pull-forward of demand in prior years and the various macroeconomic factors that we are all too familiar with,” Best Buy CEO Corie Barry said in a“With that said, we continue to expect that this year will be the low point in tech demand after two years of sales declines.