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
-
Are You a Retirement Millionaire Too Scared To Spend?If you are too scared to spend money in retirement, you may be saddled with regret. Here are three ways to safely enjoy your sizable retirement nest egg.
-
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social SecurityTreasury President Trump signed an executive order forcing the federal government to phase out paper check disbursements by the fall.
-
Seven Questions to Ask When Evaluating Personal Loan OptionsTaking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
-
How Much Does Being Rich Matter in Retirement?After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
-
The Three Biggest Fears Keeping Retirees Up at NightHere are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
-
What Can a Donor-Advised Fund Do for You? (A Lot)DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
-
Estate Planning When You Have International AssetsEstate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
-
Microsoft Stock: Innovation Spurs Its 100,000% ReturnMicrosoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
-
Three Essential Estate Planning Steps to Protect Your Nest EggAfter dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
-
Is Chasing the American Dream Ruining Your Financial Life?Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
