forecastsHolidayWorld News

Best Buy forecasts holiday quarter sales below estimates as supply issues loom - Financial Markets Worldwide

Please try another search

ReutersStock Markets7 minutes ago (Nov 23, 2021 08:26AM ET)

© Reuters. FILE PHOTO: The Best Buy logo is seen at a store in Manhattan, New York City, U.S., November 22, 2021. REUTERS/Andrew Kelly

By Uday Sampath Kumar

(Reuters) -Best Buy Co Inc forecast fourth-quarter comparable sales below analysts’ estimates on Tuesday, as the electronics retailer braces for a hit from likely product shortages during the crucial holiday shopping season.

The company’s shares, which have gained nearly 40% this year, fell 11.2% to $122.55 in premarket trading.

Retailers are under tremendous pressure to keep shelves stocked for the holiday season as shipping logjams, shuttered factories in Asia and a scarcity of raw materials rip through global supply chains.

A shortage of semiconductor chips used in electronic items has dented availability of some high-demand products, including the latest gaming consoles from Sony Corp (T:) and Microsoft Corp (NASDAQ:).

Some analysts have also warned that supplies of Apple Inc (NASDAQ:)’s latest iPhones could take a hit during the holiday season.

IPhones and new gaming consoles are hugely important for Best Buy as they not only sell in large numbers, but also act as magnets for customers who often spend on other products.

“Getting hold of Apple’s latest iPhone or its new laptops is very challenging. These items should, in theory, be providing a nice lift to sales as the holidays approach, but stock levels remain low,” Neil Saunders, managing director of research provider GlobalData said.

The anticipated supply issues led Best Buy to include easier access to the holiday season’s “hardest-to-find” products as a perk in a new $200-a-year membership program launched last month.

However, costs related to launch of the program and increased expenditure to expedite some shipments have taken a toll on the company’s profit margins, mirroring issues seen at other retailers including Walmart (NYSE:) Inc and Target Corp. (NYSE:)

Best Buy forecast fourth-quarter comparable sales between a fall of 2% and a rise of 1%, the mid point of which is below estimates of a 0.1% rise, according to IBES data from Refinitiv.

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button