Analyst Eyes 20% Revenue Drop for Best Buy, Calls COVID-19 Impact 'Unavoidable'
Wedbush is expecting a 35% drop in Best Buy revenue when the company reports fiscal Q1 results Thursday, Michael Pachter emailed investors Monday. The analyst expects a 20% falloff in a coming quarter, which could be “too rosy” if a…
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second wave of COVID-19 infections stretches out quarantines, or unemployment causes even more consumers to scale back on discretionary purchases this year. Best Buy has the “right formula for long-term growth,” but negative near-term impact from COVID-19 is "largely unavoidable,” said Pachter. Crediting the retailer for reaching “difficult financial targets it has set for itself year after year,” Pachter referenced various upcoming tech innovations it had positioned itself to benefit from that “will be delayed by supply chain disruptions and muted by a looming recession.” The company likely benefited from home office and gaming equipment demand arising from quarantine orders, said Pachter, who expects store locations to continue the curbside pickup strategy. Restrictions will ease “broadly” in Q3, the analyst forecast, “before rebounding in Q4.” Q1 ended May 2.