Best Buy on Thursday raised its near-term sales outlook, saying second-quarter revenue should come in ahead of Wall Street expectations following a quarterly report that topped estimates. The U.S. electronics retailer pointed to steady consumer purchases of laptops and smartphones and continued expansion in its advertising and marketplace businesses as drivers of the stronger outlook.
The company also confirmed a leadership transition: Chief Executive Corie Barry will leave her role at the end of October and will be replaced by Jason Bonfig, a long-time company executive who has laid out plans to sharpen the business focus on retail operations, media and the companys technology platform, broaden reach through marketplace offerings and improve the customer experience.
Best Buy said comparable sales increased 2% in the quarter ended May 3, reversing a 0.7% decline in the prior-year period and surpassing analysts expectation of roughly 1%, based on data compiled by LSEG. The company reported first-quarter adjusted earnings of $1.28 per share, beating the $1.23 per-share estimate.
Management said growth in May accelerated to a high-single-digit pace but that sales are expected to slow to about 1% for the second quarter, a moderation CFO Matt Bilunas attributed in part to comparisons with last years robust Nintendo Switch 2 launch. Even with that anticipated slowdown, the outlook remains above analysts projection of a 0.4% decline.
Best Buy reiterated its fiscal 2027 guidance for comparable sales to be in a range from a 1% decline to a 1% increase, and maintained its adjusted earnings-per-share forecast between $6.30 and $6.60 for the year.
Investors reacted positively to the results and guidance: the companys shares, which the company noted are down about 10% over the past 12 months, rose more than 6% in premarket trading.
Executives said the business is intensifying focus on higher-margin revenue streams, including Best Buy Ads and Marketplace, and expanding service offerings such as Geek Squad support and paid membership programs. CEO Barry said the company has been "scaling new profit streams like Best Buy Ads and Marketplace that we expect to provide considerable benefit over time." Management framed these moves as important as shoppers remain willing to upgrade and replace essential devices while staying cautious about larger discretionary purchases.
Bonfig, the incoming chief executive, has emphasized expanding the companys retail, media and technology platform and growing its marketplace presence as core elements of his agenda. Company commentary highlighted that this strategic pivot comes amid uneven consumer demand and the retailers dependence on electronics replacement cycles.
Best Buy also reported it has been increasing imports of computers and other electronics as a response to rising memory costs, which the company said have been driven up by a component shortage connected to strong demand. The company described this as a measure to help manage input cost pressures rather than a change in overall sourcing strategy.
Summary
Best Buy beat first-quarter profit estimates and forecast second-quarter sales above expectations, supported by continued demand for laptops and smartphones and growth in advertising and marketplace channels. A planned CEO transition will bring Jason Bonfig to the helm in October, with a strategic emphasis on higher-margin businesses and marketplace expansion. The retailer kept its fiscal 2027 guidance unchanged.
Key Points
- Comparable sales rose 2% in the quarter ended May 3, above the roughly 1% analyst expectation.
- Management is prioritizing higher-margin segments - Best Buy Ads and Marketplace - alongside services like Geek Squad and paid memberships.
- Leadership change: Corie Barry will step down at end of October; Jason Bonfig will succeed her and focus on retail, media and technology platform expansion.
Risks and Uncertainties
- Sales growth is expected to slow to about 1% for the second quarter, reflecting a pullback from Mays high-single-digit pace and tough comparisons to last years Nintendo Switch 2 launch - risk to retail and consumer electronics demand.
- Rising memory costs and a related component shortage have prompted the company to increase imports, creating input cost uncertainty that could affect margins in the technology and electronics supply chain.
- Choppy consumer demand and dependence on replacement cycles for electronics may limit upside for the retailers results if spending patterns shift further.