Best Buy’s (BBY) second quarter results surpassed Wall Street’s expectations on Thursday as new technology boosted the quarter, but the stock fell nearly 5% anyway.
“We drove growth across almost all our major product categories as well as continued strong performance in our Best Buy Ads and Marketplace initiatives,” Best Buy CEO Corie Barry said in the release.
In the second quarter, the company posted same-store sales growth of 4.1%, well above Wall Street’s 1.6% estimate and up from 1.6% in the same period last year.
Revenue came in at $9.8 billion, above the $9.6 billion expected, and adjusted earnings were $1.47 per share, also above the $1.38 per share expected. The company did see a $34 million benefit from tariff refunds in the quarter, which led to an adjusted operating income rate of 4.3%.
Best Buy said computing was the largest contributor to comparable sales growth, with sales jumping 6.8%. Due to higher memory costs, the company raised computing prices by a mid-teens percentage, and unit sales declined by high single digits.
Computing experienced the greatest impacts from the memory crunch, followed by graphics cards, computer memory itself, and then phones, said incoming CEO Jason Bonfig, who will replace Barry as chief executive on Oct. 31.
Bonfig told Yahoo Finance that customers are coming in with a budget or looking to upgrade products that are four to six years old. He noted that they are “very thoughtful about higher-end purchases, but they’re looking when … something breaks or they just absolutely need to upgrade.”
Sales in new and emerging categories, such as AI glasses and Pokémon collectible trading cards, more than doubled in Q2 compared to last year.
“We are getting to a more normalized cycle from an innovation perspective,” Bonfig said, referring to the post-COVID drop-off in new products, though he noted that it’s “hard to tell” what the rest of the year could bring,
The company raised its 2027 forecast, which surpassed Wall Street’s 2027 outlook estimates across the board, but it’s taking a calculated approach, Bonfig said.
“The customer’s very consistent,” Bonfig noted. “They’re resilient, but they are focused on deals and sales event periods, which have been very consistent with what we’ve talked about in previous quarters.”
Best Buy now expects revenue to come in between $42.3 billion and $42.8 billion, compared to its prior guidance of $41.2 billion to $42.1 billion. It also expects sales to rise in the range of 1.9% to 3.0%, up from a previously expected range of a 1% decline to a 1% increase. The guidance assumes a similar level of tariff refunds in the third quarter as in the second quarter.