Best Buy shares climbed after the electronics retailer reported fourth-quarter adjusted earnings that topped expectations and issued fiscal 2026 guidance that was stronger than some investors had feared. The results offered a measure of relief despite ongoing concerns about consumer demand and potential memory shortages affecting key product categories.
BNN Bloomberg spoke with Anthony Chukumba, managing director at Loop Capital, about the earnings beat, the company’s cost discipline and competitive positioning against Amazon, and how rising gas prices could influence consumer spending trends.
Key Takeaways
- Best Buy reported adjusted fourth-quarter earnings per share of $2.61, beating estimates of $2.46, while comparable sales declined 0.8 per cent.
- Fiscal 2026 earnings guidance of $6.30 to $6.60 per share implies roughly flat year-over-year performance, easing fears of a sharper slowdown.
- Investors had been concerned that memory shortages could weigh on PC and smartphone demand, but guidance was not as weak as some expected.
- Management continues to focus on cost control and margin-accretive initiatives such as its third-party marketplace and retail media network.
- Competitive price parity with Amazon and improved e-commerce and delivery capabilities have reduced showrooming risk and strengthened its market position.
Read the full transcript below:
ROGER: Shares of Best Buy are getting a lift today, one of the few stocks seeing a boost, after the electronics retailer posted better-than-expected adjusted profit. The stock is up about 5.3 per cent right now. Let’s get more on this from Anthony Chukumba, managing director at Loop Capital. Anthony, thank you, as always, for joining us. One of the few bright spots in the market today — with everything else unfolding — what’s driving this?
ANTHONY: I think it’s a combination of a couple of different things. First, earnings came in about 15 cents ahead of expectations for the fourth quarter, even though there was a top-line miss. But the bigger factor is that guidance for 2026 was not as bad as expected. There were a lot of concerns about memory shortages, which affect PCs and, to a lesser extent, smartphones. There was a whisper expectation that guidance would be significantly worse because of those shortages. So I think it’s the combination of those two factors.
ROGER: You say it’s not as bad, but is it still bad?
ANTHONY: I wouldn’t say it’s bad. Essentially, they earned about $6.43 in 2025 and are guiding to $6.30 to $6.60 in 2026 — so call it flattish at the midpoint. The U.S. macroeconomic environment remains quite challenging. Unemployment is starting to rise a little bit. Wage growth has slowed. The housing market continues to be weak. Consumer confidence is pretty low. And with what’s going on in Iran, gasoline prices — which had been declining for much of 2025 — are starting to rise again. In that context, flat earnings are not amazing, but they’re not terrible either.
ROGER: All of this guidance was put together before what unfolded over the weekend. If tensions involving Iran continue, how long before we might see an impact on companies like Best Buy?
ANTHONY: It really comes down to what happens with gas prices. If we see gas prices spike, that could impact Best Buy and retailers broadly. Gas prices matter not only because consumers are filling their tanks, but because of the psychological effect. People pass gas stations every day. If gas, which is around $3 a gallon on average in the U.S., were to move to $3.50 or $4, that would likely affect consumer sentiment and ultimately consumer spending.
ROGER: Looking back at the quarter, what did they do right to make this a better story than expected?
ANTHONY: Best Buy is doing a good job controlling what it can control. It can’t control product cycles or consumer demand, but it can control costs and supplier relationships. Some initiatives were encouraging. One is the Best Buy Marketplace, a third-party online marketplace, which generated about $300 million in gross merchandise value in the fourth quarter. The company also has a growing retail media network, Best Buy Ads. Those businesses are margin-accretive. They’re still investing in them, but they expect to see more benefit going forward.
ROGER: Comparing with Amazon, they’re fairly comparable on price right now. Are they maintaining that?
ANTHONY: Yes. If we were having this conversation 10 years ago, Amazon was dramatically undercutting Best Buy, which led to the showrooming issue — customers would check out a product in-store and then buy it cheaper on Amazon. Best Buy has invested significantly in price and is now largely at price parity with Amazon. There’s little incentive to buy elsewhere if you’re already in the store. They’ve also invested heavily in e-commerce — site search, navigation, reviews and last-mile delivery. Best Buy now ships from most of its stores, so it can often get products to customers as fast as, or faster than, Amazon.
ROGER: That’s significant cost discipline to be able to offer all of that.
ANTHONY: They’ve been very cost-conscious for quite some time, and that has allowed them to invest in price and other capabilities.
ROGER: Any change to your price target?
ANTHONY: We maintain an $85 price target and a buy rating.
ROGER: Anthony, thanks for joining us.
ANTHONY: Anytime.
---
This BNN Bloomberg summary and transcript of the March 3, 2026 interview with Anthony Chukumba are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
