Best Buy (BBY) beat Wall Street’s estimates across key metrics, including revenue, earnings, and same-store sales growth. However, the stock fell 4% on Thursday after the consumer electronics retailer maintained its full-year outlook, which disappointed investors.
The company expects same-store sales to range from a 1% decline to a 1% increase. On the earnings call, Best Buy CEO Corie Barry said she believes the company is “trending toward the higher end of our sales range” but that, given the uncertainty with tariffs, it seemed prudent to keep its previous guidance intact.
“The low end of the range would certainly say we’re giving lots of room for a consumer to potentially be more impacted by tariffs,” Barry said on a call with media, “but the reason we’re pointing to the high end is we don’t see evidence that that is going to happen.”
Best Buy also forecast revenue in the range of $41.1 billion to $41.9 billion, while adjusted earnings per share are guided to be between $6.15 and $6.30. Wall Street expected revenue of $41.36 billion and adjusted earnings of $6.14 for the full fiscal year, per Bloomberg consensus estimates.
Barry said the company plans to lean into promotions this holiday season to ensure it’s driving demand for value-seeking consumers.
Read more: What Trump’s tariffs mean for the economy and your wallet
Best Buy’s same-store sales grew 1.6%, marking its fastest growth rate since the third quarter of 2022. That beat Wall Street’s expected 0.53% sales decline and was driven by outperformance in gaming, with the launch of Nintendo’s Switch 2, as well as computing, mobile phones, wearables, and headphones.
“These are products that people will want to upgrade and replace, and innovation is what sparks our business,” Barry said. “It has taken some time for those two things to intersect, but I do think the growth that you saw in this quarter is part of those two things coming together.”
She noted that customers in the market to replace items have been willing to pay more for upgrades as they look to “future-proof” their tech in anticipation of further AI enhancements.
However, that growth was offset by declines in the home theater, appliance, tablet, and drone categories.
The company expects that momentum to continue in the third quarter with similar same-store sales growth as the second quarter.
Though tariffs remained in focus heading into the rest of the year. Barry said the “blended average selling price has not gone up” as it and its vendors leaned into mitigation strategies and promotions to offset the higher costs for customers.
