Best Buy Co., Inc. (NYSE: BBY) reported its results for the second quarter of fiscal 2025, showing a mixed performance. The company’s revenue for the quarter was $9.29 billion, a decrease of 3.1% from $9.58 billion in the same period last year. This decrease was primarily due to a 2.3% decline in comparable sales.
The domestic segment, which represents a significant portion of Best Buy’s business, saw revenue decline 3.0% to total $8.62 billion. The international segment also saw a decline, with revenue falling 4.0% to $665 million. Despite the revenue decline, Best Buy’s profitability improved. GAAP operating income increased to 4.1% of revenue from 3.6% a year ago. Non-GAAP operating income also increased to 4.1% from 3.8%.
The company’s GAAP diluted earnings per share (EPS) increased 7% to $1.34, while non-GAAP diluted earnings per share (EPS) increased 10% to $1.34. This improvement in profitability was driven by better performance in the domestic tablet and computer categories, which reported comparable sales growth of 6%.
Best Buy beats Q2 expectations with $1.34 earnings per share
When comparing Best Buy’s second quarter performance to market expectations, the results were somewhat mixed but trended positive. Analysts had forecast earnings per share of $1.16 and Best Buy exceeded that expectation with actual earnings per share of $1.34. This is a clear achievement and underscores the company’s effective cost management and operational efficiency.
However, revenue fell short of the $9.24 billion expected, coming in slightly higher at $9.29 billion. Although this represents a year-on-year decline, it was still above expectations, suggesting that the company managed to mitigate some of the adverse market conditions. The comparable sales decline of 2.3% was significantly better than the 6.2% decline last year and indicates a stabilization in the sales trend.
This trend was also reflected in the domestic segment, where sales fell by 2.3% compared to a decline of 6.3% in the previous year. The international segment also showed an improvement, with comparable sales falling by 1.8% compared to a decline of 5.4% in the previous year. These figures suggest that while the company still faces challenges, it is managing them better than in the past.
Best Buy Ups Forecast for Fiscal Year 2025
Best Buy has updated its financial guidance for fiscal year 2025. The company now expects comparable sales to decline 1.5% to 3.0% year-over-year, an improvement from the previous forecast of 3.0% decline to flat sales.
This revision suggests a more optimistic outlook for the remainder of the year. Best Buy also raised its non-GAAP diluted earnings per share guidance to $6.10 to $6.35 from $5.75 to $6.20, reflecting better-than-expected profitability in the first half of the year. For the third quarter of fiscal 2025, Best Buy expects comparable sales to decline by approximately 1.0% and a non-GAAP operating profit rate of approximately 3.7%.
Disclaimer: The author does not own or have a position in any securities discussed in the article.
About the author
Tim Fries is co-founder of The Tokenist. He holds a BS in Mechanical Engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim was a senior associate on the investment team in RW Baird’s US private equity division and is also co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
