Best Buy lifts annual profit forecast as tighter cost controls pay off

(Reuters) -Best Buy raised its annual profit forecast on Thursday as tighter controls on costs help the electronics retailer offset the impact from steeper discounts and promotions across its categories.

Shares of the company, which have risen about 14% so far this year, were up 8% in premarket trading.

Best Buy (NYSE:BBY ) refreshed its membership program last year and trimmed jobs as part of a restructuring plan, in a bid to help margins in the midst of softer demand at its stores.

The company expects adjusted earnings per share for fiscal year 2025 to be between $6.10 and $6.35, compared with the earlier forecast of $5.75 to $6.20 per share.

The electronics retailer is trying to improve its digital sales and shopping experience, allowing shoppers to order products online and pick them up from physical stores.

"We see a consumer who is seeking value and sales events, and one who is also willing to spend on high price point products when they need to, or when there is new compelling technology," said Best Buy's Chief Executive Officer Corie Barry.

The company also reported a smaller-than-expected drop in second-quarter comparable sales, which fell 2.3% compared with expectations of a drop of 3.2%, according to LSEG data.

Consumers in the United States looked to upgrade their laptops and tablets after several quarters of keeping a tight lid on spending on expensive electronics.

Best Buy also benefited from demand for newer features such as Microsoft (NASDAQ:MSFT )'s AI-powered Copilot+ PCs during the summer.



The company has also been offering discounts on smaller gadgets and appliances as well as televisions to appeal to consumers who are still picky about splurging as they deal with the impact of inflation.

Its domestic gross profit rate grew to 23.5% in the second quarter from 23.1% last year.

Source: Investing.com