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Best Buy reports another drop in quarterly sales amid cautious buying but business is stabilizing

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NEW YORK (AP) — Best Buy, the nation’s largest consumer electronics chain, on Thursday reported another quarterly drop in sales due to Americans pulling back on purchases of appliances and consumer-electronics gadgets to focus on essentials.

But the latest period showed Best Buy’s business stabilizing, and its results topped Wall Street expectations. The retailer based in Richfield, Minnesota, lowered its sales outlook but raised its earnings view for the current fiscal year.

Best Buy’s stock jumped more than 17% Thursday.

“Overall, customers remained deal-focused and attracted to more predictable sales moments with 4th of July, Black Friday in July and the beginning of back-to-school sales events, ” Best Buy’s CEO Corie Barry told analysts during a call. She noted that comparable sales — those from digital channels and physical stores — in July were the best of the quarter.

The company posted sales growth in tablets, computing and services, more than offsetting declines in appliances, home theater and gaming.

Barry noted that major appliances and TVs continued to be very discount-driven, something that is expected to continue through the holidays. But she said that Best Buy remains targeted and thoughtful regarding where and when the retailer cut prices, balancing profitability and sales.

Consumers have been wrestling with high prices and elevated interest rates. The government reported earlier this month that hiring was much weaker than expected in July and the unemployment rate rose for a fourth straight month. Yet since then, economic reports have shown that layoffs are still low and that activity and hiring in services industries remains solid.

Shoppers are also focusing more on experiences like travel and tickets to concerts, which also have eaten into their spending on gadgets.

For Best Buy, the latest trends are a reversal from the height of the pandemic, when its sales were fueled by outsized spending from people splurging on electronics to help them work from home, or to get their children better equipped for virtual learning. Government stimulus checks also fueled spending.

To perk up sales, Best Buy is modernizing its stores to entice shoppers and focus on its paid membership services. The company has been also reducing its layers of management and reinvesting in more labor at its stores to help shoppers.

Best Buy just added dedicated trained experts in the computing departments of hundreds of its stores and plans to do the same in its home-theater and major-appliance departments. The company said more than 60% of its workers are certified in at least two categories.

It is also banking on new gadgets like personal computers enhanced with artificial intelligence from the likes of Microsoft. While expensive, they are more efficient and offer more battery life. And these new devices will result in lower prices for older models.

Earlier this month, Best Buy announced a new live-tracking feature that uses artificial intelligence to allow customers to digitally track their deliveries and installations when they purchase large items like big screen TVs, refrigerators, washers and dryers.

Best Buy reported earnings of $291 million, or $1.34 per share for the three-month period ended Aug. 3. That compares with $274 million, or $1.25 per share, in the year-go period.

Sales slipped 3% to $9.29 billion from $9.58 billion in the quarter.

Analysts were expecting $1.16 per share on sales of $9.23 billion, according to FactSet.

Comparable sales — those sales from online channels and physical stores — fell 2.3%. That was a smaller decline from the 6.1% reported in the previous quarter.

Best Buy lowered its sales outlook for the fiscal year from the previous quarter. It now expects revenue to range from $41.3 billion to $41.9 billion, which compares to prior guidance of $41.3 billion to $42.6 billion. It projects comparable sales to decline from 1.5% to 3%. In May, it expected the range to be anywhere from unchanged to down 3%.

The company upgraded its earnings outlook for the year to a range of $6.10 to $6.35 per share. That compares with prior guidance of $5.75 per share to $6.20 per share.

Analysts were expecting $6.07 per share on sales of $41.75 billion, according to FactSet for the year.

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B.C. Conservatives promise to end stumpage fees, review fire management if elected

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VANDERHOOF, B.C. – British Columbia Conservatives are promising changes they say will bring more stability to the province’s struggling forest industry.

Leader John Rustad announced his plan for the sector a week before the official launch of the provincial election campaign, saying a Conservative government would do away with stumpage fees paid when timber is harvested and instead put a tax on the final products that are produced.

Rustad said Saturday that under a provincial Conservative government, a small fee may be charged upfront, but the bulk would come at the end of the process, depending on what type of product is created.

He also promised to review how wildfires are managed, as well as streamline the permit process and review what he calls the province’s “uncompetitive cost structure.”

“British Columbia is by far the highest cost producers of any jurisdiction in North America. We need to be able to drive down those costs, so that our forest sector can actually be able to do the reinvestment, to be able to create the jobs and make sure that they’re still there to be able to support our communities,” he said.

The governing New Democrats meanwhile, say eliminating stumpage fees would inflame the softwood lumber dispute with the United States and hurt forestry workers.

In a statement issued by the NDP, Andrew Mercier, the party’s candidate in Langley-Willowbrook, said Rustad failed to support the industry when he was in government under the former BC Liberals.

“Not only will Rustad’s old thinking and recycled ideas fail to deliver, his proposal to eliminate stumpage would inflame the softwood lumber dispute — punishing forestry workers and communities,” Mercier said, accusing Rustad of ignoring the complexity of the challenges facing the industry.

The softwood lumber dispute between the U.S. and Canada stretches back decades. In August, the U.S. Department of Commerce nearly doubled duties on softwood lumber.

International Trade Minister Mary Ng has said Canada has taken steps to launch two legal challenges under the Canada-United States-Mexico Agreement.

Rustad said a provincial Conservative government would push hard to get a deal with the United States over the ongoing dispute “whether it’s with the rest of Canada or by itself.”

He said his party’s proposed changes are in the name of bringing “stability” and “hope” to the industry that has seen multiple closures of mills in rural communities over the last several years.

Most recently, Canfor Corp. decided to shutter two northern British Columbia sawmills earlier this month, leaving hundreds of workers unemployed by the end of the year.

According to the United Steelworkers union, Canfor has closed 10 mills in the province since November 2011, including nine in northern B.C.

Jeff Bromley, chair of the United Steelworkers wood council, said Saturday the idea of changes in favour of taxing the final product has been floated in the past.

He said the finer details of the Conservative plan will be important, but that the system needs to be improved and “new ideas are certainly something I’d be willing to entertain.”

“Something needs to happen, or the industry is just going to bleed and wither away and be a shadow of its former self,” Bromley said.

“Politics aside, if (Rustad) can come up with a policy that enables my members to work, then I would be supportive of that. But then I’m supportive of any government that would come up with policies and fibre for our mills to run. Period.”

When Canfor announced its latest closures, Forests Minister Bruce Ralston said the sector was a “foundational part” of the province and the current NDP government would work to support both local jobs and wood manufacturing operations.

This report by The Canadian Press was first published Sept. 14, 2024

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Christian McCaffrey is placed on injured reserve for the 49ers and will miss at least 4 more games

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SANTA CLARA, Calif. (AP) — The San Francisco 49ers placed All-Pro running back Christian McCaffrey on injured reserve because of his lingering calf and Achilles tendon injuries.

The move made Saturday means McCaffrey will miss at least four more games after already sitting out the season opener. He is eligible to return for a Thursday night game in Seattle on Oct. 10.

McCaffrey got hurt early in training camp and missed four weeks of practice before returning to the field on a limited basis last week. He was a late scratch for the opener on Monday night against the Jets and now is sidelined again after experiencing pain following practice on Thursday.

McCaffrey led the NFL last season with 2,023 yards from scrimmage and was tied for the league lead with 21 touchdowns, winning AP Offensive Player of the Year.

The Niners made up for McCaffrey’s absence thanks to a strong performance from backup Jordan Mason, who had 28 carries for 147 yards and a touchdown in San Francisco’s 32-19 victory over the New York Jets. Mason is set to start again Sunday at Minnesota.

After missing 23 games because of injuries in his final two full seasons with Carolina, McCaffrey had been healthy the past two seasons.

He missed only one game combined in 2022-23 — a meaningless Week 18 game last season for San Francisco when he had a sore calf. His 798 combined touches from scrimmage in the regular season and playoffs were the third most for any player in a two-year span in the past 10 years.

Now San Francisco will likely rely heavily on Mason, a former undrafted free agent out of Georgia Tech who had 83 carries his first two seasons. He had at least 10 touches just twice before the season opener, when his 28 carries were the most by a 49ers player in a regular-season game since Frank Gore had 31 against Seattle on Oct. 30, 2011.

The Niners also have fourth-round rookie Isaac Guerendo and Patrick Taylor Jr. on the active roster. Guerendo played three offensive snaps with no touches in the opener. Taylor had 65 carries for Green Bay from 2021-23.

San Francisco also elevated safety Tracy Walker III from the practice squad for Sunday’s game against Minnesota.

___

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Canada’s Newman, Arop secure third-place finishes at Diamond League track event

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BRUSSELS – Canada walked away with some hardware at the Diamond League track and field competition Saturday.

Alysha Newman finished third in women’s pole vault, while Marco Arop did the same in the men’s 800-metre race.

Newman won a bronze medal in her event at the recent Paris Olympics. Arop grabbed silver at the same distance in France last month.

Australia’s Nina Kennedy, who captured gold at the Summer Games, again finished atop the podium. Sandi Morris of the United States was second.

Newman set a national record when she secured Canada’s first-ever pole vault medal with a bronze at the Olympics with a height of 4.85 metres. The 30-year-old from London, Ont., cleared 4.80 metres in her second attempt Saturday, but was unable conquer 4.88 metres on three attempts.

Arop, a 25-year-old from Edmonton, finished the men’s 800 metres with a time of one minute 43.25 seconds. Olympic gold medallist Emmanuel Wanyonyi of Kenya was first with a time of 1:42.70.

Djamel Sedjati, edged out by Arop for silver in Paris last month, was second 1:42.87

This report by The Canadian Press was first published Sept. 14, 2024.

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