Best Buy (BBY) raised its full-year outlook on Thursday as the electronics retailer's fiscal second-quarter results surpassed Wall Street's expectations.
The company now anticipates adjusted earnings to come in between $6.70 and $6.90 per share for fiscal 2027, up from its previous guidance of $6.30 to $6.60. The current consensus on FactSet is for non-GAAP EPS of $6.62.
Revenue is pegged at $42.3 billion to $42.8 billion, compared with the prior forecast of $41.2 billion to $42.1 billion. Comparable sales are expected to rise by 1.9% to 3%, up from the previous outlook range for a decline of 1% to an increase of 1%. The Street is looking for sales of $42.08 billion and same-store sales growth of 1.2%.
"We are raising our annual financial guidance due to the strong first half performance and our momentum as we enter the second half of the year," incoming Chief Executive Jason Bonfig said in a statement. Bonfig, who currently serves as the retailer's chief customer, product and fulfillment officer, is set to succeed Corie Barry in the top role, effective Nov. 1.
Best Buy's shares fell 4.5% in Thursday trade, although the stock has gained about 25% so far this year.
In an emailed client note, Truist Securities said it believes the downward stock movement is "all from positioning" given the 35% increase over the last few months "and the movement of the goal posts going into the print."
For the three months through Aug. 1, Best Buy's adjusted EPS improved to $1.47 from $1.28 a year earlier, ahead of the average analyst estimate of $1.39. Revenue advanced to $9.78 billion from $9.44 billion, exceeding the Street's view for $9.59 billion.
Comparable sales accelerated 4.1% from the prior-year quarter's 1.6% gain, defying the consensus on FactSet for a slowdown in growth to 1.3%. Domestic comparable sales moved 4.5% higher, buoyed by computing and home theater products, as well as some emerging categories, including artificial intelligence glasses and trading cards, according to the retailer.
"Every product category except entertainment (which was up against a huge comparison) comped positive, which we think helps support our bullish view that the combo of growing replacement demand, operational changes and the early stages of an AI-driven hardware upgrade cycle are gaining traction," Truist Managing Director Scot Ciccarelli wrote in the note.
For the ongoing quarter, Best Buy expects enterprise comparable sales growth of 1% to 3%, Barry said during an earnings call, according to a FactSet transcript. "We have started the quarter with August month-to-date comparable sales growth at the high end of this range," Barry added. Analysts are currently estimating same-store sales to inch up by 0.1%.
Last week, retail giant Walmart (WMT) reported better-than-expected fiscal second-quarter results, although US comparable sales growth decelerated more than Wall Street projected amid a pharmacy-related headwind. Target (TGT) lifted its full-year outlook as tariff refunds helped double the retailer's fiscal second-quarter earnings year over year.
Price: $82.92, Change: $-4.52, Percent Change: -5.17%
