Best Buy (BBY) Stock Surges 12% on Earnings Beat Despite Weak Sales and Outlook

TLDR

• Best Buy (BBY) beat Q4 adjusted EPS estimates with $2.61 vs. the $2.47 analyst consensus, sending the stock up nearly 12% in premarket trading.
• Revenue for the quarter came in at $13.81 billion, down 1% year-over-year and below the $13.87 billion consensus.
• Comparable sales fell 0.8%, missing expectations for a 0.1% rise.
• Full-year guidance was below analyst forecasts: EPS of $6.30–$6.60 vs. estimates of $6.66, and comparable sales of -1% to +1% vs. estimates of +1.63%.
• Best Buy raised its quarterly dividend by 1 cent to $0.96 per share, giving it the highest yield in the Consumer Discretionary Select Sector SPDR ETF.

Best Buy (BBY) reported its fiscal fourth-quarter results on Tuesday, posting a profit that surprised Wall Street — even as revenue and the full-year outlook fell short.

The stock jumped as much as 11.8% in premarket trading after the results dropped, rebounding from an 11-month low hit just the day before.

Best Buy Co., Inc., BBY

BBY had closed Monday down 0.6% at $61.59, capping a four-month losing streak that saw it fall nearly 25%. Coming into Tuesday, expectations were already on the floor.

Adjusted earnings per share came in at $2.61, up from $2.58 a year ago and well ahead of analyst estimates of $2.46–$2.47. That beat was the spark the stock needed.

Revenue for the quarter ended January 31 came in at $13.81 billion, a 1% decline from the prior year and slightly below the consensus of $13.87 billion.

Comparable sales dropped 0.8%, missing forecasts for a 0.1% gain. That’s a miss, but not a disaster given the backdrop.

CEO Corie Barry noted that overall market share held at least flat during the holiday quarter, despite softer consumer demand across the electronics retail category.

Cost of sales came in at $10.93 billion, down from $11.03 billion a year earlier — a sign the company is managing its cost base.

Barry also flagged that comparable sales for the full year returned to growth for the first time in three years, and that Best Buy’s advertising business performed well.

Full-Year Guidance Misses the Mark

The company guided for full-year revenue of $41.2 billion to $42.1 billion, against a consensus of $42.2 billion. Comparable sales are expected to range from down 1% to up 1%, below the analyst estimate of 1.4% growth.

Adjusted EPS guidance of $6.30–$6.60 also came in below the $6.63–$6.66 consensus range.

Wedbush’s Matthew McCartney had written before the report that low expectations were already baked in, and there wasn’t much in sight to re-ignite investor interest. The earnings beat gave the market something to work with.

Dividend Gets a Small Boost

Best Buy raised its quarterly dividend by a penny to $0.96 per share. Based on Monday’s closing price, that puts the annual yield at 6.23%.

That’s the highest dividend yield among components of the Consumer Discretionary Select Sector SPDR ETF — and more than five times the implied yield on the S&P 500 of 1.16%.

The company cited a “mixed macro environment” as a factor in its muted annual outlook, with consumers under pressure from tariff-related cost increases and an uncertain labor market.

BBY has shed 29% over the past 12 months through Monday, while the S&P 500 gained 17.6% over the same period.

Adjusted Q4 EPS of $2.61 topped estimates of $2.46, while full-year EPS guidance of $6.30–$6.60 came in below the $6.63 consensus.

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