Best Buy stock pops on elevated profit outlook, solid Q2 results

Best Buy (NYSE:BBY ) raised its annual profit forecast on Thursday and reported better-than-expected top and bottom lines for the fiscal Q2 2025.

The retailer’s shares jumped more than 8% in premarket trading.

BBY posted Q2 earnings per share (EPS) of $1.34, topping the consensus estimate of $1.16. The company generated $9.29 billion in revenue, slightly above the projected $9.24 billion.

Enterprise comparable sales declined by 2.3%, up from the 6.2% decline last year and above the analysts' expectations of a 3.17% drop.

International comparable sales were down 1.8% compared to the estimated drop of 2.22% and last year's 5.4% dip. U.S. comparable sales also fell by 2.3%, better than the estimated 3.33% decline.

The gross margin came in at 23.5%, matching analysts' estimates and up slightly from 23.2% the previous year.

Looking ahead, Best Buy raised its FY2025 EPS guidance to $6.10-$6.35, up from the previous range of $5.75-$6.20 and the consensus of $6.08. However, the company lowered its FY2025 revenue outlook to $41.3-$41.9 billion, compared to the consensus estimate of $41.81 billion.

For Q3 FY25, Best Buy expects comparable sales to decline by around 1.0% and projects a non-GAAP operating income rate of approximately 3.7%.

“Today we are reporting better-than-expected sales and profitability results for the second quarter,” said Corie Barry, Best Buy CEO.

“We delivered strong results in our Domestic tablet and computing categories, which together posted comparable sales growth of 6% versus last year.”

Source: Investing.com