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."
Sign up for Kiplinger’s Free E-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
-
Don't Miss These Sub-$100 Prime Day Deals for a Smarter, Safer HomeUse these under-$100 Prime Day deals on Ring, Blink, Nest and other top smart home brands to upgrade your home for less this summer.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Stock Market Today: Trump's Copper Comments Cause a Stir
Markets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful BillThe law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market JittersMarket volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
Stock Market Today: Trump Reextends His Tariff DeadlineWhen it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."
-
Should You Start a 'Trump Account' for Your Child?"Trump Accounts" for kids is part of the One Big, Beautiful Bill that was just signed. Look at if it's worth it for your children.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the SidelinesForget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
Can You Be a Good Parent to an Only Child When You're Also a Business Owner?Author and social psychologist Susan Newman offers advice to business-owner parents on how to raise a well-adjusted single child by avoiding overcompensation and encouraging chores.
-
How Advisers Can Steer Their Clients Through Market Volatility (and Strengthen Their Relationships)Financial advisers need to be strategic when they communicate with clients during market volatility. The goal is to not only reassure them but to also help them avoid rash decisions, deepen your relationship with them and build lasting trust.
