Best Buy Q4 Report Outperforms Earnings Projections but Company Stock Falls as Sales Growth and Revenue Drags

By Thomas Price Thursday, February 25, 2021

Major electronics and appliance retail company Best Buy beat out analyst expectations in their Q4 report, posting strong numbers across the board. Despite this, many investors remain anxious about the company moving forward as the ending of the COVID-19 pandemic may begin shifting consumer spending toward businesses in entertainment and activities. As a result of a slowed sales growth and these concerns for the future, the electronics company saw its shares fall in pre-market trading in spite of the strong numbers.

A Best Buy storefront.

Best Buy Q4 Report vs. Expectations

In Best Buy’s Q4 report, the company posted $16.937 billion in total revenue, increasing by over $1 billion from the previous quarter, where total business only resulted in $15.196 billion. Despite the growth, the revenue posted by the electronics company fell slightly short of Wall Street expectations that had revenues pegged at $17.23 billion. While the electronics company was disappointed in total revenues, business expectations rebounded in earnings as Best Buy reported $3.48 per share, just outperforming analyst expectations of $3.45 of earnings per share.

While Best Buy posted earnings and revenues very close to expectations, growth in online sales continued to be a high point for the company as business in this sector grew by 89.3%. Online sales for the company made up 43% of total business with curbside pick-up and delivery skyrocketing due to the pandemic.

Best Buy was one of the few companies around the world that saw incredible success amidst the COVID-19 pandemic. Without other entertainment outlets such as movie theaters, theme parks, restaurants, and travel, consumer spending was more focused on electronics and appliances. This became especially true as more schools began adopting a remote-learning approach which forced many families to buy laptops, tablets, or desktop computers.

Best Buy’s Future Outlooks and Stock Market Response

Best Buy expects business to fall fairly even with prior years, predicting anywhere between -2% to 1% growth in the new fiscal year, though a surge of 20% growth in Q1. The overall flat expectations for the fiscal year along with the shifting trends in consumer spending has caused many investors to remain unconvinced by the business. As a result, Best Buy saw company shares drop by over 8% in pre-market trading. This has brought the business to a value of just about $104 per share, a drop of nearly $10 a share in early morning trading alone.

In a statement released alongside the Q4 report, CEO Corie Barry commented on the future of Best Buy, saying, “As it relates to FY22 specifically, the demand for technology remains at elevated levels as we start the year. However, there is a high level of uncertainty related to the impacts of the COVID-19 pandemic that makes it difficult to predict how sustainable these trends will be, including, but not limited to, the timing of administration of the vaccine and the subsequent impact to customer demand and shopping patterns, as well as potential government stimulus actions.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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