Best Buy CEO: Holiday Season Is Hard To Forecast

Best Buy Co Inc BBY came with outstanding results on Thursday, surprising many on the Street. Shares of the company are trading at $37.7 levels, up over 6.5% from Wednesday’s close. Just around a year ago, analysts on Street were suggesting that the electronic retailer will cease to exist in the near future, but it seems things are not as bad. After facing a major slump in January, Best Buy’s stock is back to trading at the same levels from where it fell.

With such great performance, one would have expected the company to be gung-ho about its guidance. However, Best Buy’s CEO, Hubert Joly is cautious. In a phone call with CNBC’s Courtney Reagan discussed the difficulty in predicting holiday seasons’ sale.

“We are excited about many categories and improved shipping for the holidays. Holiday season is hard to forecast. It’s a very competitive environment, a lot of mass merchants have promotions on consumer electronics, a category that has been volatile,” Reagan quoted Joly as saying.

On phone sales, Joly told Reagan “There are puts and takes. We are delighted to have innovation in the phone category […] availability of phones is spotty and uneven and fluctuates, so from an investors standpoint we have to be measured [in forecasts].”

Reagan highlighted that although strong third quarter sales is a great thing for Best Buy, a disruption at West coast ports can cause trouble for the company. Jolly told Reagan that replenishments can be a cause of concern, “we brought some inventory [forward] and because we had a stronger quarter we sold some of that merchandise, our inventory was lower than what we told investors it would be.”