Best Buy Q3 Misses Market, Warns On Q4 Comps, Cuts FY25 Outlook; Stock Dips In Pre-market

(RTTNews) - Best Buy Co. Inc. (BBY), while reporting third-quarter adjusted earnings and revenues below market estimates, on Tuesday issued flat or weak fourth-quarter comparable sales view. The firm also trimmed its outlook for fiscal 2025, below the Street view.

In pre-market activity on the NYSE, the shares were losing around 7.4 percent to trade at $86.11.

Corie Barry, Best Buy CEO, said, "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. In the first few weeks of Q4, as holiday sales have begun and the election is behind us, we have seen customer demand increase again."

For the fourth quarter, the company expects comparable sales to be flat to down 3 percent compared to last year, and adjusted operating income margin to be in the range of 4.6 percent to 4.8 percent.

For fiscal 2025, Best Buy now projects adjusted earnings per share of $6.10 to $6.25, compared to prior guidance of $6.10 to $6.35.

Annual revenue is now expected to be $41.1 billion to $41.5 billion, compared to previous outlook of $41.3 billion to $41.9 billion.

Analysts on average expect the company to report earnings of $6.27 per share on sales of $41.58 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Comparable sales for the year is now expected to be down 2.5 percent to 3.5 percent, compared to prior guidance of down 1.5 percent to 3 percent.

Meanwhile, the company maintained adjusted operating income margin outlook of 4.1 percent to 4.2 percent, which represents slight expansion compared to FY24 on a 52-week basis.

In its third quarter, Best Buy's earnings totaled $273 million or $1.26 per share, compared to $263 million or $1.21 per share last year.

Adjusted earnings were $1.26 per share for the period, compared to $1.29 per share last year. Analysts had expected the company to earn $1.29 per share.

The company's revenue for the quarter fell 3.2 percent to $9.445 billion from $9.756 billion last year. The Street was looking for $9.63 billion.

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