Shares of Best Buy Co Inc (NYSE:BBY) are seeing a dip in premarket trading this Tuesday. The company’s fourth-quarter results have stirred up a buzz, reporting a 4.8% year-on-year decline in sales to $13.948 billion, surpassing the analyst forecast of $13.702 billion. Noteworthy is the 5.2% drop in domestic revenue and a marginal 0.2% fall in international revenue. Impressively, enterprise comparable sales saw a 0.5% uptick.
The gross profit took a hit, decreasing by 2.8% year-on-year to $2.9 billion. However, the margin showed improvement, expanding by 40 basis points to 20.9%. On the flip side, the operating margin contracted by 220 basis points to 1.6%, resulting in a 61.3% drop in operating income for the quarter to $217 million. The non-GAAP EPS of $2.58 outshined the analyst consensus of $2.40.
As of February 1, Best Buy held $1.57 billion in cash and equivalents, with a robust operating cash flow of $2.1 billion over the past twelve months. The company also maintained its commitment to shareholders, returning a total of $415 million through dividends amounting to $200 million and share repurchases totaling $215 million in the fourth quarter of FY25.
In a strategic move, Best Buy’s board of directors approved a 1% hike in the regular quarterly dividend to $0.95 per share, slated to be distributed on April 15 to shareholders recorded by March 25.
CEO Corie Barry expressed satisfaction in exceeding sales expectations for the fourth quarter, attributing the growth to robust computing sales and improved performance in other categories.
Looking ahead, Best Buy anticipates an adjusted EPS for FY26 in the range of $6.20 to $6.60, falling slightly short of the estimate of $6.55. The revenue projection for FY26 stands at $41.4 billion to $42.2 billion, against an estimated $41.82 billion. The company also foresees comparable sales growth of 0.0% to 2.0% and plans for capital expenditures ranging from $700 million to $750 million.
While offering guidance for FY26, Best Buy omitted the potential impact of recent tariffs. It also outlined its intention to allocate around $300 million for share repurchases during the fiscal year.
CFO Matt Bilunas shared insights, anticipating consumer behavior in FY26 to mirror the previous year’s resilience amid soaring inflation. The company projects comparable sales to hover between flat and 2% growth, with a stronger growth trajectory expected in the latter half of the year due to upcoming product launches and initiatives.
For the first quarter of FY26, Best Buy anticipates a slight dip in comparable
