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A Best Buy store in Chicago, Ill., on Nov. 25, 2022.JIM VONDRUSKA

Best Buy Co Inc BBY-N on Thursday joined peers with a cautious annual earnings forecast as uncertainty over the U.S. economic outlook tempers expectations for a recovery in demand for TVs, laptops and other electronic products.

U.S. retailers offered bigger discounts than usual during the holiday season to stoke demand as surging costs of rent and food over the last year hammered spending on non-essentials.

Best Buy’s comparable sales decreased 9.3 per cent in the holiday quarter, slightly more than Wall Street expectations.

The company sees no relief this year, forecasting comparable sales to fall 3 per cent to 6 per cent. Analysts on average were expecting a 1.9 per cent decline.

“As we enter fiscal 2024, macroeconomic headwinds will likely result in continued volatility, and we are preparing for another down year for the (consumer electronics) industry,” Chief Executive Officer Corie Barry said in an analyst call.

Best Buy will also close or remodel some of its larger stores, and open more smaller-sized outlets that sell used and refurbished electronics to pull in more budget-oriented shoppers, she added.

The company expects fiscal 2024 adjusted earnings per share of $5.70 to $6.50, below analysts’ estimates of $6.71.

Walmart WMT-N, Target Corp TGT-N and other retailers have also issued conservative forecasts as still high U.S. consumer prices have raised fears that the Federal Reserve could further lift borrowing costs to cool demand.

However, Best Buy’s forecast was even more conservative than its big-box retail rivals, as it has greater exposure to discretionary categories, M Science Senior Analyst John Tomlinson said.

“Best Buy’s forecast implies things are worse than they were pre-pandemic, while trends, relative to 2019, are generally still much higher for many other companies,” Tomlinson said.

On an adjusted basis, the company earned $2.61 per share in the fourth quarter ended Jan. 28, beating analysts’ estimates of $2.11, according to IBES data from Refinitiv.

Best Buy’s shares were last up about 1 per cent in early trading.

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