Best Buy (BBY) is one of the worst S&P 500 stocks Tuesday after the electronics retailer came up short of top- and bottom-line expectations for its fiscal 2025 third quarter and cut its full-year outlook.
In the three months ended November 2, Best Buy's revenue decreased 3.2% year over year to $9.45 billion, pressured by a 2.9% drop in enterprise comparable-store sales. Its earnings per share (EPS) fell 2.3% from the year-ago period to $1.26.
"In the third quarter, our teams delivered an in-line non-GAAP operating income rate on sales that were a little softer than expected," said Best Buy CEO Corie Barry in a statement. "During the second half of the quarter, a combination of the ongoing macro uncertainty, customers waiting for deals and sales events, and distraction during the run-up to the election, particularly in non-essential categories, led to softer-than-expected demand."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
BBY's top and bottom lines came up short of analysts’ expectations. Wall Street was anticipating revenue of $9.6 billion and earnings of $1.29 per share, according to CNBC.
As a result of the weak quarter, Best Buy reduced its full-year outlook. The company now expects revenue in the range of $41.1 billion to $41.5 billion and earnings per share of $6.10 to $6.25. This compares to its previous forecast for revenue of $41.3 billion to $41.9 billion and earnings of $6.10 to $6.35.
"For the fourth quarter, we expect comparable sales versus last year to be flat to down 3% and our non-GAAP operating income rate to be in the range of 4.6% to 4.8%," said Best Buy Chief Financial Officer Matt Bilunas.
Is Best Buy stock a buy, sell or hold?
Heading into Tuesday's session, Best Buy was up nearly 23% for the year to date on a total return basis (price change plus dividend). And Wall Street has a bullish tilt on the high-yielding dividend stock (4% at current levels).
According to S&P Global Market Intelligence, the average analyst target price for BBY stock is $103.36, representing implied upside of nearly 20% to current levels. Meanwhile, the consensus recommendation is Buy.
Not everyone is all in on the consumer discretionary stock, though. Financial services firm Wedbush has a Neutral rating (equivalent to a Hold) on Best Buy with a $95 price target.
"BBY has the most exposure to increased tariffs in our hardlines coverage given its reliance on imported products (we estimate 90% of cost of goods sold), many of which come from or depend on parts from China (we estimate 40% of COGS), and very discretionary products," wrote Wedbush analyst Seth Basham in a November 21 note.
"While BBY would move to mitigate these costs, the complexity of the electronics supply chain and its deep ties to China make this difficult to do quickly,' the analyst added.
Related Content
-
The 'Vinyl Rule' of Retirement: Plan for Two Sides in Your Next ActBecause “Life is what happens when you’re busy making other plans.”
-
Five Destinations for Active and Chill Travelers AlikeWhether you reach for a paddleboard or a lounge chair, find your groove in a location that offers something for both kinds of travelers.
-
I'm a Financial Planner: Here Are Five Phases of Retirement Planning You Have to Get RightA solid retirement plan is a must, but you can't go halfway. Neglecting just one area of your plan could cause the whole thing to collapse.
-
An IRS Enrolled Agent's Top 10 Reasons to Stop Doing Your Own TaxesTaxes can get complicated quickly, and the more money you have, the tougher they tend to be. So, if you have any of these 10 tax situations, don't risk it.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
Dismal August Jobs Report Offers Rate-Cut Relief: What the Experts Are SayingThe August jobs report came in much lower than expected, lifting the odds that several rate cuts will come through by year's end.
-
Greed, Fear and Market Volatility: A Financial Adviser's Guide to Keeping Emotions Out of Investment DecisionsDon't panic! And don't be so confident in the stock market that you overlook risk. Instead, be logical. Your retirement security could depend on it.
-
Want a Financial Adviser Who Shares Your Faith? Look for One With a CKA DesignationFinancial professionals with a Certified Kingdom Advisor certification are committed to integrating biblical principles with sound financial advice.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market TodayThe S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were up the day before a critical jobs report.
-
SPACs, SMRs and How to Invest in the Nuclear InsurgencyBig nuclear deployments are in process, but small modular reactors could be a better way to meet rapidly rising electric power demand.
