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Best Buy Poised for In-Line First-Quarter Comparable Sales, Wedbush Says

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Best Buy Poised for In-Line First-Quarter Comparable Sales, Wedbush Says

Best Buy (BBY) is expected to report in-line comparable sales for the first quarter and issue a conservative outlook amid factors including product shortages and a leadership transition, Wedbush Securities said in a note Friday.

The brokerage forecasts 1% same store sales growth at the electronics retailer in the fiscal first quarter, compared with the consensus estimate of 0.9%. It expects April-quarter revenue of $8.82 billion, matching the consensus on FactSet.

Best Buy is scheduled to release its quarterly results on Thursday.

"Apple's (AAPL) record March quarter and MacBook Neo demand point to solid contribution while Logitech delivered an encouraging read on peripherals, citing a resilient premium US consumer, solid tax refund lift and US gaming sales turning positive in February," Wedbush analysts including Matthew McCartney wrote.

TVs and appliances, however, likely faced light consumer demand in the first quarter, according to the research note.

Investors are expected to focus more on guidance, with Best Buy seen outlining a second-quarter comparable sales outlook just below consensus expectations that call for a 0.3% drop, McCartney said.

The expected conservative guide is attributable to a shortage of products including Neo and Mac Mini, as well as the Chief Executive transition, McCartney said. Last year's Switch 2 launch also strengthens the case for a cautious guide.

In April, Best Buy said Corie Barry will step down as CEO on Oct. 31, with Chief Customer, Product and Fulfillment Officer Jason Bonfig set to succeed her.

The brokerage views the upcoming FIFA World Cup as a tangible catalyst that could boost TV sales in the second quarter, particularly amid the availability of affordable Roku (ROKU) sets.

"While we remain optimistic on the long-term initiatives, the principal near-term risk in our view are rising memory-cost inflation still flowing through to device pricing across multiple vendors with resulting demand pressure requiring increased promotional depth," McCartney said.

Price: $61.65, Change: $+0.50, Percent Change: +0.81%

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