A Best Buy retail store in San Bruno, California.
was falling sharply in premarket trading Tuesday after the electronics retailer posted fiscal third-quarter earnings that topped estimates and the company boosted its sales outlook for fiscal 2022.
A decline in gross margin likely was the reason for the stock’s sharp decline in premarket trading. Gross margin in the third quarter fell to 23.5% from 23.6% a year earlier.
Best Buy (ticker: BBY) earned $2.08 a share on an adjusted basis in the third quarter. Sales were $11.91 billion.
Analysts surveyed by FactSet expected Best Buy to report third-quarter earnings of $1.95 a share on sales of $11.65 billion. A year earlier, the company earned $2.06 a share on sales of $11.85 billion.
Best Buy’s third-quarter same-store sales in the U.S. rose 2%, higher than expectations of an increase of 0.3%.
The company said it expects fourth-quarter revenue of $16.4 billion to $16.9 billion vs. estimates of about $16.8 billion. Best Buy forecast comparable sales between a 2% decline and an increase of 1%; analysts expect same-store sales to rise 0.1%.
Best Buy raised its fiscal 2022 revenue outlook to between $51.8 billion to $52.3 billion from previous guidance of $51 billion to $52 billion.
Best Buy said it expects same-store sales growth in fiscal 2022 of 10.5% to 11.5%, higher than prior guidance.
The stock fell 11.2% to $122.56 in premarket trading Tuesday.
After the close of trading Monday, shares of Best Buy had risen 38% so far in 2021 vs. the
‘s gain of 24.7%.
Write to Joe Woelfel at firstname.lastname@example.org