Holiday-quarter revenue falls short despite profit improvement
Best Buy reported mixed holiday-quarter results on Tuesday, with sales declining and missing Wall Street expectations, while earnings topped forecasts as profitability improved. The consumer electronics retailer said demand remained soft during the gift-giving season, but investors focused on stronger margins and guidance that signaled stability after several years of revenue declines.
Shares of Best Buy closed more than 7% higher on Tuesday. For the fiscal fourth quarter ended Jan. 31, Best Buy reported adjusted earnings per share of $2.61, ahead of the $2.47 estimate from analysts surveyed by LSEG. Revenue was $13.81 billion, below the $13.88 billion consensus estimate.
Revenue declined from $13.95 billion in the year-ago quarter. Net income rose to $541 million, or $2.56 per share, compared with $117 million, or 54 cents per share, a year earlier. Excluding one-time items, including charges tied to its health business, Best Buy reported adjusted EPS of $2.61.
2026 outlook points to flat to modest growth with narrow comp range
For the current fiscal year, Best Buy expects revenue between $41.2 billion and $42.1 billion, compared with $41.69 billion in the most recent fiscal year. The company forecast adjusted earnings per share of $6.30 to $6.60, versus adjusted EPS of $6.43 last year.
Best Buy expects comparable sales, which track online and store sales for locations open at least 14 months, to range from a 1% decline to a 1% increase. The tight range reflects a cautious outlook in a mixed macro environment while indicating the retailer believes it can defend share and protect profitability even if top-line growth remains muted.
Chief Executive Corie Barry said in a news release that consumer electronics demand remained lackluster during the holiday period, but internal data suggests Best Buy’s market share was at least flat. Chief Financial Officer Matt Bilunas said the company sees momentum in the business but expects to continue navigating uneven economic conditions.
Consumer behavior remains split, with innovation driving pockets of demand
Best Buy said it has been dealing for years with more price-sensitive consumers, a slower housing market, and less innovation in technology, factors that have contributed to delayed purchases, particularly for large appliances. On a call with reporters, Barry said spending patterns remain consistent across income groups. She said sales have been softer in higher-cost categories, while more value-oriented shoppers remain resilient and focused on deals.
More than half of Best Buy’s customer base earns $100,000 or more, Barry said, providing some insulation even in a choppy demand environment. She added that where the industry is delivering new products and clearer innovation, consumers across income levels have shown willingness to pay higher price points.
Tariffs, category shifts, and higher-margin revenue streams
Higher tariffs have increased costs for Best Buy because many consumer electronics are imported. Barry said raising prices is the company’s last resort and that it is instead focusing on diversifying the supply chain and negotiating costs with vendors.
Comparable sales fell 0.8% in the quarter, driven by weaker demand for appliances and home theater products. Best Buy said those declines were partly offset by growth in computing and mobile phones, areas that have been showing stronger momentum than the broader category mix.
The company also continues to build out higher-margin businesses. Best Buy has expanded its advertising efforts and launched a third-party marketplace in August. Barry said the number of advertising partners nearly doubled from the prior year and that the marketplace has significantly increased the number of products available, part of a broader effort to broaden assortment while lifting profitability.
