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Second Half Looks Better For CE Retailers Claims Major Retailer

The second half of 2022 is looking better for the consumer electronics and appliance industry according to the one of the world’s biggest CE retailers who claims that technology is a key part of people’s lives today.

US Company Best Buy whose share value has tumbled 29% this year said overnight that during the past six months rising wages and supply-chain costs pressured profit and while they show little sign of abating soon, they do expect business to pick up in the second half of the year according to Chief Executive Officer Corie Barry.

Best Buy Co.’s latest forecast cut was better than what analysts were expecting with costs only “a little higher” than planned Barry said.

The business has forecast that a worsening economic backdrop and limited supply has forced them to cut its annual forecast for earnings, revenue and same-store sales.

The company also revised its outlook for operating profit to between 5.2% and 5.4% of sales, down from the previous prediction of 5.4%.

Barry said she expects “elements of soft demand” this year but not a full-on US recession.

US consumers are “getting a little bit more wary” amid the highest inflation rates in four decades, she said.

But technology is becoming more central to consumers’ lives, limiting the extent to which they’re looking to cut spending on CE products.

Easing supply-chain constraints should improve availability of popular merchandise such as Samsung and Apple products, video-game consoles and audio products later in the year, she said.

While the company made inroads among lower-income and female shoppers during the pandemic, customer demographics are starting to shift back to their traditional skew toward higher-income men, the CEO said.

According to Bloomberg Best Buy revenue slipped 8.5% to $10.6 billion in the three months ended in late April.

That exceeded the $10.4 billion average of analyst estimates.

Inventory only rose about 9%, a modest increase compared with the jumps of more than 30% at Walmart and 40% at Target, which prompted markdowns.

“We think investors were bracing for an even larger outlook reduction,” said Scot Ciccarelli, an analyst at Truist Securities, in a note to clients. “However, with such a modest reduction, we suspect investors will be asking, ‘Is that enough?’”



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