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What’s happening: Shares of Best Buy fell on Tuesday, after the company reported its results for the third quarter.
What happened: The retailer reported better-than-expected earnings for the latest quarter.
However, Best Buy lowered its projections for the year, with shoppers spending less on big-ticket items.
How were the results: The Richfield, Minnesota-based company reported a decline in sales for the latest quarter.
Why it matters: Customer spending remained low on items such as electronics and home furnishings, despite a slowdown in inflation. Retailers like Best Buy rolled out promotions much earlier than usual to attract shoppers to their stores.
Best Buy also started its Black Friday sale earlier and brought back its Doorbusters event.
The company’s domestic revenues fell 3.3% year-over-year to $8.70 billion in the third quarter, with a 2.8% decline in comparable sales. Markets were expecting comp sales to be down just 0.85%.
Domestic online comp sales slipped 1% to $2.73 billion. International revenues fell 1.6% to $748 million, with a 3.7% decline in comp sales.
“During the second half of the quarter, a combination of the ongoing macro uncertainty, customers waiting for deals and sales events, and distraction during the run-up to the election, particularly in non-essential categories, led to softer-than-expected demand,” CEO Corie Barry said. She added, “In the first few weeks of Q4, as holiday sales have begun and the election is behind us, we have seen customer demand increase again.”
Management lowered their revenue guidance for fiscal year 2025 to a range of $41.1 billion to $41.5 billion, from their earlier outlook of $41.3 billion to $41.9 billion. They cut their projection for comparable sales to a decline of 3.5% to 2.5%, from their previous outlook of a contraction of 3.0% to 1.5%.
Management projected earnings in the range of $6.10 to $6.25, versus their previous forecast of $6.10 to $6.35 per share.
How shares responded: Best Buy’s shares fell 4.9% to close at $88.48 on Tuesday, following the release of quarterly results. The stock has gained around 15% year to date.
What to watch: Investors will continue monitoring the holiday shopping season, which is expected to significantly impact Best Buy’s overall results ahead. The inflation level will also remain one of the major concerns.
Context: The EUR/USD forex pair edged lower this morning as investors assessed the inflation outlook.
Details: The latest data released showed investor expectations for Eurozone inflation easing below the 2% level for first time since July 2022.
Inflation levels in the Eurozone have eased from the record highs of 10.6% reached in October 2022. The region’s inflation rate came down to as low as 1.7% in September, before accelerating back to 2% in October.
Weakness in the US dollar limited the overall losses for the EUR/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.15% to 106.86.
The EUR/USD pair slipped by 0.04% to 1.0487 this morning, while the EUR/GBP forex pair fell by 0.08% to 0.8340. The STOXX Europe 600 Index had declined by 0.57% to close at 505.90 on Tuesday.
What to watch: Investors await the release of economic data on Germany’s GfK consumer confidence (1330 UAE Time), France’s unemployment benefit claims (1500 UAE Time) and France’s jobseekers total (1500 UAE Time) today.
The GfK Consumer Climate Indicator for Germany, which improved to -18.3 heading into November, is expected to decline to -18.6 into December. Analysts expect initial jobless claims in France to decline to 30,000 in October from 42,200 in the previous month.
Other Markets: Asian indices traded mixed this morning, with China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index up by 0.58% and 0.56%, respectively, and Japan’s Nikkei 225 down by 0.72%.
Moscow said it is looking to retaliate to Ukraine using US-made missiles to attack Russia twice over the past three days. The news sent the RUB/USD pair higher in forex trading this morning.
Taiwan’s consumer confidence index fell to 75.49 in November, from 77.06 in the previous month. The latest reading being the lowest since July exerted pressure on the TWD/USD forex pair.
China’s industrial profits dipped by 4.3% year-over-year to 5,868.04 billion yuan during the first 10 months of the year. This followed a 3.5% decline in the previous 10-month period, sending the CNY/USD pair lower in forex trading this morning.
Australia’s monthly Consumer Price Index rose by 2.1% year-over-year in October, remaining unchanged for the second month in a row. The latest reading coming in better than market estimates of 2.3% lent support to the AUD/USD forex pair.
The Reserve Bank of New Zealand cut its official cash rate by 50 basis points at its latest policy meeting, in-line with expectations, which sent the NZD/USD pair higher in forex trading this morning.
India’s M3 money supply (1530 UAE Time), Mexico’s balance of trade (1600 UAE Time), US MBA mortgage applications (1600 UAE Time), durable goods orders (1730 UAE Time), GDP growth rate (1730 UAE Time), personal income (1730 UAE Time), personal spending (1730 UAE Time), corporate profits (1730 UAE Time), goods trade balance (1730 UAE Time), initial jobless claims (1730 UAE Time), PCE price index (1730 UAE Time), wholesale inventories (1730 UAE Time), continuing jobless claims (1730 UAE Time), Chicago PMI (1845 UAE Time), pending home sales (1900 UAE Time), EIA crude oil stocks change (1930 UAE Time), EIA gasoline stocks change (1930 UAE Time), EIA distillate stocks change (1930 UAE Time), EIA natural gas stocks change (2100 UAE Time), Baker Hughes oil rig count (2200 UAE Time) and Baker Hughes total rigs count (2200 UAE Time), as well as Russia’s unemployment rate (2000 UAE Time), business confidence (2000 UAE Time), corporate profits (2000 UAE Time), industrial production (2000 UAE Time), real wage growth (2000 UAE Time) and retail sales (2000 UAE Time).
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