Best Buy (NYSE: BBY) heads into its first quarter earnings report Thursday morning under heightened expectations, with key product launches and stronger tax refunds seen as potential tailwinds.
Wall Street is forecasting same-store sales growth of 0.9%, a rebound from the 0.8% decline recorded in the fourth quarter when consumers pulled back on holiday spending.
Best Buy itself projected same-store sales growth of 1% for the quarter, aligning closely with analyst consensus estimates.
Revenue is expected to rise approximately 1% to $8.8 billion, with earnings growth of 6% projected at $1.22 per share.
The report marks the first since the company announced that CEO Corie Barry will step down at the end of the third quarter.
Barry will be succeeded on Oct. 31 by Jason Bonfig, who currently serves as Best Buy’s chief customer, product, and fulfillment officer.
Barry will remain with the company as a strategic adviser for six months following the transition, and Bonfig will also replace her on the board.
Wall Street will be watching closely for signs of momentum in higher-margin businesses such as marketplace and advertising, alongside the impact of new product launches, as a K-shaped economy continues to divide consumer segments.
“Apple’s record March quarter and MacBook Neo demand point to solid contribution while Logitech delivered an encouraging read on peripherals, citing a resilient premium US consumer, solid tax refund lift and US gaming sales turning positive in February,” Wedbush analyst Matthew McCartney wrote in a note to clients.
Forward guidance is expected to draw significant investor attention, with McCartney describing it as the “larger variable” heading into the print.
In the fourth quarter, Best Buy CFO Matt Bilunas flagged a “mixed macro environment” as the company set full-year revenue guidance in the range of $41.2 billion to $42.1 billion.
Same-store sales guidance for the full year ranged from a 1% decline to growth of 1%, with adjusted earnings per share expected between $6.30 and $6.60.
“We expect a conservative 2Q guide given lingering product shortages, including for Neo and Mac Mini, CEO transition, lapping last year’s Switch 2 launch,” McCartney said.
Telsey Advisory Group analyst Joe Feldman offered a positive early assessment of the incoming chief executive, stating, “We will be listening for initial commentary from CEO-elect Jason Bonfig, whom we view as a solid, logical choice given his skill set and tenure at Best Buy.”
Feldman cautioned that “headwinds remain around tariff visibility, and new concerns have arisen about higher oil prices.”
