Key Takeaways:
Best Buy reported second-quarter adjusted earnings of $1.47 a share, beating the $1.35 consensus by $0.12, as revenue rose 3.6 percent to $9.78 billion from $9.44 billion a year earlier.
"We are very pleased to report we outperformed expectations in the second quarter with comparable sales growth of 4.1% and a higher-than-expected adjusted operating income rate," Chief Executive Officer Corie Barry said. "We drove growth across almost all our major product categories as well as continued strong performance in our Best Buy Ads and Marketplace initiatives."
Revenue topped the $9.54 billion analysts expected, while comparable sales climbed 4.1 percent. The adjusted operating income rate came in at 4.3 percent, below some investor expectations as higher compensation costs and added investment in the Marketplace and Best Buy Ads businesses weighed on expenses. Domestic revenue rose 4.3 percent to $9.07 billion on comparable sales growth of 4.5 percent, with gross margin improving to 24.0 percent from 23.4 percent, helped by $34 million of tariff refunds.
Computing and home theater led growth, alongside emerging products such as AI glasses, while traditional gaming lagged. Best Buy raised its fiscal 2027 adjusted EPS forecast to $6.70-$6.90, whose $6.80 midpoint tops the $6.62 consensus, and lifted revenue guidance to $42.3 billion-$42.8 billion against the $42.12 billion estimate. Comparable sales guidance was upgraded to growth of 1.9 percent to 3.0 percent from a prior range of a 1.0 percent decline to a 1.0 percent increase.
For the third quarter, Best Buy expects comparable sales growth of 1.0 percent to 3.0 percent and an adjusted operating income rate of 4.1 percent to 4.2 percent. Shares fell 3.94 percent in pre-market trading as investors focused on margins and operating expenses despite the beat.
The guidance raise shows management expects demand for computing, AI-enabled devices and retail media to keep accelerating. Investors will watch the third-quarter earnings call for updated segment margins as Best Buy spends on store formats and AI-enabled shopping tools.
This article is for informational purposes only and does not constitute investment advice.
