Best Buy forecast muted annual sales and profit on Tuesday, citing a “mixed macro environment,” but a strong beat on holiday quarter profit sent shares of the top U.S. electronics retailer surging 10 per cent in premarket trading.
The company has been under pressure as Americans battling the rising cost of living linked to tariffs and an uncertain labor market prioritized value and delayed big-ticket purchases such as home theaters and appliances.
“Our data sources show our overall market share was at least flat, pointing to slightly softer customer demand for our industry during the holiday quarter,” said CEO Corie Barry.
U.S. retail sales were unexpectedly unchanged in December, while wage growth slowed to 0.7% in the fourth quarter, after increasing 0.8 per cent in the July-September quarter, data showed.
However, Best Buy managed to trim costs during the reported quarter, including lowering expenses at Best Buy Health in the U.S.
Its cost of sales came in at US$10.93 billion in the quarter ended Jan. 31, down from $11.03 billion a year earlier.
On an adjusted basis, the company posted quarterly profit of $2.61 per share, compared with analysts’ estimates of $2.47, according to data compiled by LSEG.
“Best Buy delivered a fourth quarter that underscored the company’s operational resilience in a challenging consumer environment, though the results revealed the mounting headwinds facing the business as it enters fiscal 2027,” said Ana Garcia, analyst with CFRA Research.
The retailer projected full-year comparable sales to be down one per cent to up one per cent, compared with analysts’ estimates of a 1.63 per cent rise.
Its adjusted earnings per share range of $6.30 to $6.60 also missed estimates of $6.66 per share.
“The guide signals modest growth with overall demand normalization – which was better than feared,” Evercore ISI analyst Greg Melich said.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sriraj Kalluvila)
