Electronics Demand at Best Buy Wanes—But People Are Still Buying Laptops

Laptop demand is brisk at Best Buy, but sales are slowing for home theater equipment and other discretionary electronics.

Consumers looking to replace older technology drove the retailer’s sales of laptops up 7% year-over-year, Best Buy (BBY) executives said on an earnings call Tuesday. But demand for large, discretionary items has waned, and price cuts can only lift that demand so much, CEO Corie Barry said on the call, according to a transcript provided by AlphaSense.

The electronics giant echoed other retailers’ observations about consumers backing away from big-ticket items: Target (TGT) isn’t moving as many TVs; Lowe’s Cos. (LOW) is supplying fewer renovation projects; and Williams-Sonoma (WSM) says it isn’t selling as much furniture.

Best Buy’s comparable sales fell 2.9% year-over-year, and both domestic and international revenue slipped, Best Buy said. The retailer’s stock price dropped more than 5% Tuesday after its results fell short of Wall Street’s expectations.

Computer, Tablet Upgrades Help Best Buy

Amid the challenging environment, computer and tablet sales remained a source of resilience for Best Buy. Still, these sales were, in part, driven by equipment growing obsolete, rather than excitement over new gadgets, Chief Merchandising Officer Jason Bonfig said.

“Right now we do think the biggest thing that’s driving [it] is really that upgrade and replacement,” Bonfig said in the earnings call. “That will probably continue into next year as we think about the end-of-life support of Windows 10 that happens in October of 2025.”

Comparable-sales growth from laptops was counteracted by declines in other more discretionary categories, Barry said. Best Buy cut prices on TVs and appliances to bolster its market share, she said, which helped with demand—but only so much.

“It can be very hard to stimulate demand because the customer … regardless of price point, just is not as interested,” she said.