The supply chain crunch hit Best Buy’s top line during the holiday buying season and will continue to negatively affect sales into 2022. That’s the word from Best Buy Co., Inc.’s (NYSE: BBY) as it reported its results for the 13-week fourth quarter ended January 29, 2022 (Q4 FY22), as compared to the 13-week fourth quarter ended January 30, 2021 (Q4 FY21).
For the quarter, sales fell 2.6% to $14.99 billion. Overall for Fiscal Year 2002, the company had revenues of $51.761 billion, up 9.5% over the previous fiscal year. Heading into this year, which is the company fiscal year 2023, Best Buy is predicting a decline of 1% to 4% with annual revenues between $49.3 billion and $50.8 billion.
“Q4 sales of $16.4 billion were impacted by more constrained inventory than expected, including some high-demand holiday items, and the temporary reduction in store hours in January due to Omicron-induced staffing challenges,” says CEO Corie Barry. “We are deliberately investing in our future and furthering our competitive differentiation which, as expected, impacted our Q4 profitability. The biggest areas of investment were our new membership program, technology and Best Buy Health, all core to our future growth potential.”
Barry continues, “FY22 was another record year. In addition to record revenue and earnings, our leaders drove new ways of operating and our employees worked tirelessly to meet our customers’ technology needs with excellent service. From a financial perspective, our comparable sales growth was 10.4% on top of a very strong 9.7% last year, with revenue up $8.1 billion over the past two years.”
She went on the praise the speed in which the company was able to deliver online orders and how it had an improved customer satisfaction rate despite the lack of available products.
“I am truly grateful for, and continue to be impressed by, our associates’ dedication, resourcefulness and flat-out determination,” she adds.
CFO Matt Bilunas said the two biggest variables facing the company this year will be a short-term decline in consumer spending now that the government stimulus money is gone, and the company’s investment in Best Buy Totaltech, its membership program.
“As we look to FY25, we expect the consumer electronics industry will return to the level we saw this past year, which is much higher than pre-pandemic levels, and that Totaltech, Best Buy Health and other initiatives will drive meaningful growth,” he notes.
Wall Street reacted positively to the earnings report with Best Buy’s stock up 8% initially. The company announced a quarterly dividend to investors and planned to repurchase $1.5 billion in stock.