Best Buy reported second-quarter fiscal 2027 results that topped profit and revenue expectations, yet shares fell 4.8% as higher-than-anticipated selling, general and administrative expenses offset gains.
The consumer electronics retailer posted adjusted earnings per share of $1.47, exceeding the $1.35 consensus, while revenue reached $9.78 billion against the $9.65 billion estimate. Gross profit margin improved by 60 basis points to 24%, contributing to operating income of 4.3%. Domestic marketplace gross merchandise volume rose to about $300 million, prompting an upward revision to the full-year target to $1.3 billion.
Expenses weighed on the bottom line, with SG&A costs increasing $130 million year-over-year, well above the initial guidance of $30 million. International revenue declined 4.2%, while the Best Buy Business segment grew 21% to more than $1.1 billion annually.
Computing segment performance reflected mixed trends, with average selling prices up in the mid-teens but unit volumes down in the high single digits. Mobile phones posted growth for a fourth straight quarter, and home theater sales reached their highest level since the second quarter of fiscal 2022.
Management raised full-year adjusted EPS guidance to a range of $6.70 to $6.90, up from the prior $6.62 consensus. The company also announced a $300 million share buyback program and reaffirmed a 10% growth target for Best Buy Ads on a $900 million base.
Best Buy’s valuation metrics remained in focus, with a trailing twelve-month P/E of 15.4x and a forward P/E of 13.4x. The stock offers a 4.4% dividend yield, marking the 13th consecutive annual increase. Analysts’ consensus price target implies limited upside of 2.8%, while an internal fair-value estimate suggests a 15.7% potential gain to $96.32.
Leadership transitions were also highlighted, with Corie Barry concluding her tenure as CEO following the earnings call. Jason Bonfig is set to assume the role on November 1, while Anne Bramman joins as the incoming chief financial officer. Analysts anticipate Bonfig’s first full quarter in charge to begin with the third quarter of fiscal 2027, targeting comparable sales growth of 1% to 3% and an operating margin of 4.1% to 4.2%.
