Best Buy Beats Q2 Estimates, Raises 2027 Outlook Amid Computing Strength

Best Buy topped second‑quarter earnings expectations and lifted its 2027 outlook, driven by strength in computing and new‑category sales.

Tariff Refunds Boost Profit Margins

■Best Buy (BBY) reported $9.8 billion of revenue, surpassing the $9.6 billion consensus by $200 million.

■Adjusted earnings came in at $1.47 per share, beating the $1.38 estimate by $0.09.

■A $34 million tariff‑refund benefit lifted adjusted operating income to 4.3 %.

Computing Segment Faces Price‑Volume Trade‑Off

■Comparable‑store sales grew 4.1 %, well above the Street’s 1.6 % forecast.

■Computing led the gain, with sales up 6.8 %; however, higher memory costs prompted a mid‑teens price increase (~%15) and a high‑single‑digit decline in unit sales.

■Graphics cards, memory, and phones felt the next‑largest pressure, while incoming CEO Jason Bonfig noted shoppers are “budget‑conscious or looking to upgrade four‑ to six‑year‑old gear.”

New Categories Surge and Forward Guidance

■Sales in emerging categories such as AI glasses and Pokémon trading cards more than doubled year‑over‑year.

■The company raised its 2027 revenue outlook to $42.3‑$42.8 billion, up from the prior $41.2‑$42.1 billion range.

■Expected sales growth is now 1.9 %‑3.0 %, versus the previous ‑1 %‑+1 % band.

■Adjusted earnings guidance was lifted to $6.70‑$6.90 per share, from $6.30‑$6.60.

■Bonfig said the firm expects a similar level of tariff refunds in Q3 as in Q2, and cited appliance replacements and anticipation for Grand Theft Auto VI as near‑term catalysts.

Bora Yalın: Best Buy’s quarterly beat underscores resilient consumer demand, yet the computing segment’s price‑volume squeeze highlights margin pressure from component cost inflation. The temporary lift from tariff refunds masks underlying profitability challenges, making the company’s push into AI‑wearables and collectibles, along with its raised 2027 outlook, a strategic signal that it is seeking new growth engines beyond traditional electronics.