Best Buy Hikes Outlook After Hot Summer Quarter

Hard times create geek men, geek men create good times.

Despite tariff chaos, soaring electronics prices, and deflating consumer sentiment (not to mention all the other endless long-term structural headwinds for strip mall retailers), Best Buy delivered a strong beat in its earnings report on Thursday, hiking its outlook in the process. Its trick? Following consumers’ lead, wherever they may want to go.

Gotta Buy ‘Em All

Sales of new and emerging categories (read: geeky items du jour, such as AI-powered wearable glasses and collectible Pokémon trading cards) more than doubled in the quarter, CEO Corie Barry said in a call with analysts. That offset declines felt across traditional categories such as appliances and video games, though the company was quick to note that the latter category was doomed to look disappointing in comparison to last summer’s blockbuster launch of the Nintendo Switch 2. Overall revenue jumped 3.6% on the year, to just shy of $9.8 billion; its Computing and Mobile segment jumped 6.8%, as higher costs due to the AI-driven memory crunch offset lower unit sales.

And while the company has pivoted hard into e-commerce in recent years, its physical footprint, a.k.a. the tactile experience, is beginning to pay off again:

• Visits to Best Buy stores rose 2.2% in the quarter, marking the chain’s first frame of positive traffic growth in four years, according to data from market intelligence firm Placer.ai. Meanwhile, traffic to stores outfitted with IKEA “shop-in-shops,” a recent partnership that allows consumers to pair Best Buy appliances and electronics with IKEA furniture, has nearly doubled regular locations, Placer.ai says.
• Best Buy has also successfully turned its physical footprint into effective distribution hubs for its growing online pick-up business; 45% of online orders are picked up in store, and Best Buy now offers brands the ability to buy advertising on displays nearby waiting customers. More than 20% of Best Buy visits last fewer than 10 minutes, versus just 14% for comparable discretionary chains, Placer.ai says, signalling a strong pick-up operation.

Go-RefundMe: Shares of the company have jumped roughly 50% since May as investors bought into the turnaround story. Best Buy raised its outlook for the full fiscal year to a range between $42.3 billion and $42.8 billion, besting Wall Street’s expectations. Alas, shares of the company fell 4% on Thursday following the earnings call, as traders seemed happy to book profits following a big summer rally. Consider it a classic case of best-buying the hype and selling the news.