Best Buy shares down as it offers muted profit goals

NEW YORK » Shares of Best Buy fell Tuesday after the nation’s largest consumer electronics chain outlined long-term profit goals that displeased investors.

Best Buy also reiterated that it wasn’t slashing costs as much as it did in past years as it invests more in online services to compete with online leader Amazon.com.

The Richfield, Minnesota, company said Tuesday that for fiscal 2021 it expects earnings per share of $4.75 to $5.00. That represents an 8 to 9 percent compound annual growth rate from fiscal 2017.

Best Buy Co. said that it also expects enterprise revenue of $43 billion for 2021 compared with $39.4 billion in fiscal 2017.

Analysts expected $5.30 per share on revenue of $40.24 billion, according to FactSet.

Best Buy is trying to make itself indispensable to shoppers as people shop more online. It’s been beefing up the customer service in its appliance departments. This fall, it’s showcasing experiences of voice-activated devices from the likes of Amazon’s Alexa controlled Echo and Google Assistant at 700 stores. Best Buy is also rolling out a free service this month where salespeople will sit with customers at their own homes to help make recommendations on TVs, streaming services and more.

The service, which was tested in five markets, will be expanded to more cities around the country. Amazon, though, has reportedly also been trying out a program that sends its employees to shoppers’ houses for free “smart home” recommendations.

So far, Best Buy’s strategies are resonating with shoppers. Last month, it reported that revenue at U.S. stores open at least a year rose 5.4 percent during the company’s fiscal second quarter, while Wall Street had estimated a 2.2 percent increase.