Best Buy surges on earnings beat

Investing.com -- Best Buy Co., Inc. (NYSE: BBY) shares surged in premarket trading on Tuesday after reporting its fourth quarter earnings.

The retailer posted fourth-quarter adjusted earnings per share of $2.61, beating analyst estimates of $2.47 by $0.14. However, revenue of $13.81 billion fell short of the $13.91 billion consensus and declined 1% from $13.95 billion in the prior-year quarter. Comparable sales decreased 0.8% for the quarter.

The company issued fiscal 2027 guidance with adjusted EPS of $6.30 to $6.60, with a midpoint of $6.45 that falls below the analyst consensus of $6.65. Revenue guidance of $41.2 billion to $42.1 billion, with a midpoint of $41.65 billion, also came in below the $42.2 billion consensus.

For the first quarter, Best Buy expects comparable sales growth of approximately 1% and an adjusted operating income rate of approximately 3.9%. Shares surged 14.1% following the results.

"We are pleased to report better-than-expected profitability for the fourth quarter," said Corie Barry, Best Buy CEO. "Our comparable sales, while within our guidance range, declined 0.8% compared to last year. Our data sources show our overall market share was at least flat, pointing to slightly softer customer demand for our industry during the holiday quarter."

The company's domestic segment generated revenue of $12.58 billion, down 1.1% YoY, with the largest declines in home theater and appliances, partially offset by growth in computing and mobile phones. Domestic gross profit rate of 20.9% remained approximately flat, as growth in Best Buy Ads and Marketplace offset lower product margin rates.

For fiscal 2026, Best Buy returned to positive comparable sales growth of 0.5% and expanded its operating income rate. The board approved a 1% dividend increase to $0.96 per share, payable April 14, 2026.

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