Best Buy Q2 Earnings Call Highlights

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Best Buy exceeded expectations in Q2: Revenue rose 3.6% to $9.8 billion, comparable sales increased 4.1%, and adjusted EPS climbed 15% to $1.47. Strength in computing, home theater, mobile phones and emerging categories drove the performance.

The company raised its fiscal 2027 outlook to revenue of $42.3 billion, $42.8 billion, comparable-sales growth of 1.9%, 3%, and adjusted EPS of $6.70, $6.90, while cautioning that computing growth may slow amid higher memory costs and difficult comparisons.

Best Buy (NYSE:BBY) reported second-quarter fiscal 2027 results that exceeded its prior expectations, supported by growth in computing, home theater, mobile phones and newer product categories. The company raised its full-year outlook while outlining continued investments in retail media, its third-party marketplace, store formats and AI-enabled shopping tools.

Revenue for the quarter totaled $9.8 billion, up 3.6% from a year earlier. Enterprise comparable sales increased 4.1%, above the company's prior expectation for roughly 1% growth. Adjusted operating income rate rose about 40 basis points year over year to 4.3%, while adjusted diluted earnings per share increased 15% to $1.47.

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CEO Corie Barry, who said the call would be her final earnings call as chief executive, attributed the performance to employee execution and momentum in categories tied to replacement needs and product innovation. Jason Bonfig, the company's chief customer, product and fulfillment officer and incoming CEO, said Best Buy's results reflected both internal initiatives and a healthy demand backdrop for its product categories.

Computing was the largest weighted comparable-sales driver in the quarter, marking its 10th consecutive quarter of positive comparable sales. Best Buy Business sales rose 21% from the prior year, helping support the category. Barry said the company's business-to-business operation generates more than $1.1 billion in annual sales and has been growing at roughly 15% to 20% in the first half.

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Home theater was the second-largest weighted comp contributor, with the company reporting domestic television sales growth of more than 10% year over year. Bonfig cited product assortment, inventory availability, delivery and installation improvements, as well as the launch of RGB television technology. Best Buy said it will be the only national retailer offering RGB TVs for customers to discover, experience and purchase during the next year.

The company also reported that sales in a group of emerging categories, including AI glasses, trading cards and health rings, more than doubled from a year earlier. Bonfig said those categories collectively contributed about 1 percentage point to comparable sales during the quarter.

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Mobile phones delivered a sixth consecutive quarter of growth, aided by expanded carrier partnerships and store operating improvements. Major appliances posted slight sales growth, which management attributed to investments in pricing, marketing, product availability and faster delivery. Best Buy said next-day appliance availability is now offered in nearly all metro delivery locations, compared with less than half in the first quarter.

Traditional gaming sales declined as the company lapped the prior-year launch of the Nintendo Switch 2. Management expects the fourth-quarter release of Grand Theft Auto VI to support gaming software, hardware and accessories.

The company's U.S. marketplace reached approximately $300 million in gross merchandise value during the second quarter. Best Buy now expects marketplace GMV of $1.3 billion for the full year, citing stronger-than-anticipated performance. The company plans to begin adding international marketplace sellers later in the quarter, expanding participation beyond sellers with a U.S. physical presence.

Best Buy also announced the phased rollout of Ask Blue, a conversational AI shopping and support assistant. The tool can compare products, assess compatibility, provide product and support information, and direct customers to self-service tools or live support. The company also completed a commerce integration with OpenAI, allowing customers to discover products, receive recommendations and make Best Buy purchases within ChatGPT.

For fiscal 2027, Best Buy raised its guidance to revenue of $42.3 billion to $42.8 billion, comparable-sales growth of 1.9% to 3%, adjusted operating income rate of 4.4% to 4.5%, and adjusted diluted earnings per share of $6.70 to $6.90. Capital expenditures are expected to be approximately $750 million.

Third-quarter comparable-sales growth is expected to be 1% to 3%.

Third-quarter adjusted operating income rate is projected at approximately 4.1% to 4.2%.

August month-to-date comparable sales were at the high end of the company's 1% to 3% second-half growth range.

Best Buy said computing growth is expected to slow in the second half as the company laps two years of growth and a strong third quarter last year that benefited from the end of Windows 10 support. The company is also managing industry-wide increases in memory costs. In the second quarter, computing average selling prices increased in the mid-teens while unit sales declined in the high single digits.

Bonfig said Best Buy is working with vendors to maintain product choices at key price points and is using trade-ins, financing and promotions to help customers manage higher prices. Management said the memory-cost issue has primarily affected computing rather than other categories.

Barry said the consumer remains value-focused and responsive to sales events, but is still willing to purchase higher-priced products when replacement needs arise or new technology offers compelling benefits. The company also said it did not see material evidence of broad customer demand pull-forward following a major product price announcement.

Bonfig is set to formally assume the CEO role on Nov. 1, while Anne Bramman recently joined Best Buy as chief financial officer.

Best Buy Co, Inc is a leading North American consumer electronics retailer that sells a broad range of products including computers, mobile phones, televisions and home theater systems, major appliances, smart-home devices, gaming hardware and software, wearables and related accessories. The company operates through a mix of large-format stores, smaller specialty locations and an e-commerce platform, offering national and private-brand merchandise from major consumer-technology manufacturers as well as third-party sellers.

Beyond product retailing, Best Buy provides a suite of services aimed at installation, repair and ongoing technical support.

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