Best Buy (Best Buy (BBY)) shares jumped nearly 16% on Thursday after the electronics retailer delivered a better-than-expected first-quarter report. The company's adjusted earnings of $1.28 per share beat the analyst consensus of $1.23, while revenue of $8.94 billion also topped the Street's $8.83 billion estimate.
The numbers were driven by solid demand across several categories. Enterprise revenue rose 1.9% year over year to $8.9 billion, with comparable sales up 2%. Domestically, revenue hit $8.2 billion and comparable sales grew 1.8%, led by strength in gaming, computing, mobile phones, and services. Online sales accounted for 32% of domestic revenue, generating $2.6 billion, up 1.4% from last year.
Best Buy's adjusted operating income rate expanded 30 basis points to 4.1%, helped by SG&A leverage from higher revenue. The company's marketplace and advertising initiatives — including Best Buy Ads and its marketplace platform — also contributed to gross profit expansion. Domestic gross margin improved 20 basis points to 23.7%.
International revenue rose 7% to $687 million, driven by 4.7% comparable sales growth and favorable currency effects.
The company returned $202 million to shareholders through dividends during the quarter and still expects to spend about $300 million on share repurchases in fiscal 2027. Best Buy's board also authorized a regular quarterly cash dividend of 96 cents per share, payable on July 9, 2026, to shareholders of record as of June 18, 2026.
Looking ahead, Best Buy reaffirmed its full-year fiscal 2027 outlook. It continues to expect adjusted EPS of $6.30 to $6.60 (versus the $6.48 consensus) and sales of $41.2 billion to $42.1 billion (versus $41.78 billion expected). The operating income margin forecast remains 4.3% to 4.4%, with further gross margin improvement expected from advertising and marketplace initiatives.
CFO Matt Bilunas offered an encouraging update on current trends: "Comparable sales have started strong in May, with month-to-date growth up in high single digits. Our comparable sales outlook for the full quarter is approximately 1% growth as we start to lap last year's very successful gaming launch in June. We expect our second-quarter adjusted operating income rate to be approximately 3.9%, which is flat to last year."
Best Buy shares closed Thursday at $74.81, up 15.96% on the day.
