Best Buy forecasts 2021 profit largely below estimates, shares fall
Best Buy Co Inc, the No.1 U.S. consumer electronics retailer, on Tuesday forecast fiscal 2021 adjusted earnings largely below Wall Street estimates, sending its shares down as much as 10 percent.
The forecast, announced ahead of Best Buy`s first investor day since 2012, added to investor concerns as it came less than a month after Chief Executive Hubert Joly cautioned on the company`s comparable sales growth.
Best Buy said on Tuesday that it expected operating income of $1.9 billion to $2 billion in its fiscal year ending January 2021.
The operating income forecast suggests "limited growth" from Goldman`s average estimate of $1.93 billion this year, though it is aided by an extra week in the fiscal year, Goldman Sachs analyst Matthew Fassler wrote in a note.
Fassler is rated 4 of 5 stars by Thomson Reuters StarMine for the accuracy of his estimates on Best Buy.
Best Buy has been a bright spot in the gloomy U.S. retail environment.
The company has benefited from closing underperforming stores, improving customer service and, most importantly, matching Amazon.com Inc`s low prices.
Those efforts have helped Best Buy beat analysts` sales estimates in six of the past eight quarters, a performance unmatched by other electronics retailers.
Best Buy on Tuesday forecast adjusted earnings of $4.75 to $5.00 per share. Analysts on average were expecting $4.97 per share, according to Thomson Reuters I/B/E/S.
Best Buy said it expected enterprise revenue of $43 billion for 2021. Analysts on average were expecting $40.73 billion.
The company`s shares slightly recovered in afternoon trading and were down 8.5 percent at $52.45. They had gained about 34 percent since the beginning of the year.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.