The situation: Best Buy’s comparable sales rose 1.6% in Q2, its fastest pace in three years, driven by gains in gaming, computing, and mobile phones. A major boost came from the high-profile launch of Nintendo Switch 2, which pushed June sales up nearly 10%—the retailer’s best month since March 2021, per Bloomberg Second Measure, which tracks US debit and credit transactions.
The results: The company topped expectations on both revenues and earnings:
- Adjusted EPS fell 4.5% YoY to $1.28, beating analysts’ forecast of $1.22.
- Revenues increased 1.6% YoY to $9.44 billion, above the $9.24 billion expected.
Despite the beat and Q3 sales trending toward the high end of its forecast, Best Buy reaffirmed its full-year guidance. The retailer expects revenues of $41.1 billion to $41.9 billion and adjusted EPS of $6.15 to $6.30 (In May, it had lowered its profit outlook from prior guidance of $6.20 to $6.60). CFO Matt Bilunas cited uncertainty over potential second-half tariff impacts—on both consumers and the business—as the reason for caution.
Tough landscape: Best Buy faces persistent headwinds. Elevated interest rates and a weak housing market have weighed on appliances and other big-ticket items, while tariffs have raised costs and forced the retailer to hike some prices.
- Still, CEO Corie Barry said on the earnings call that consumer behavior has been largely stable across recent quarters. Customers are “resilient but deal-focused,” which has helped drive traffic during promotions like the company’s July sales event.
- Shoppers remain “thoughtful” about large purchases, she noted, but are willing to spend when needed or when new technology emerges. She added that lower-income customers haven’t meaningfully pulled back.
Our take: Best Buy is experimenting to reignite growth. Earlier this month it rolled out a third-party marketplace to broaden its assortment and began testing a store-within-a-store partnership with Ikea, positioning its appliances inside Ikea kitchens and laundry rooms. While neither move is likely to be a game-changer, in today’s tough environment, even small wins matter. Still, to spark lasting growth, Best Buy may need to augment these moves with bolder bets in services and subscriptions.