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Best Buy posts disappointing sales for Q1 as consumers pull back on appliances, electronics

Best Buy (BBY) continues to struggle with sluggish sales as consumer demand fizzles after a spike during the pandemic.

The electronics retailer reported mixed fiscal 2025 first quarter results on Thursday before market open. Adjusted earnings per share came in at $1.20, beating estimates of $1.08. But its net sales of $8.85 billion were a drop compared to $9.47 billion a year ago and the $8.97 billion anticipated for this quarter.

CEO Corie Barry told Yahoo Finance that consumers remain "uneven" on a media call, as they continue to prioritize necessities like food, fuel, and lodging.

Best Buy's total US sales dropped 6.3%, led by declines in appliances (down 18.5%), entertainment (down 11.3%), and consumer electronics (down 8.3%).


Computing and mobile phones were down just 2.2%, compared to the 4.17% decline expected, while international sales fell 3.3%.

Online sales dropped 6.1% in the quarter; it made up 30.8% of total US revenue, slightly more than the 30.5% from a year ago.

The company's service category, like its membership offerings, helped boost profit in the US, resulting in "better-than-expected Q1 profitability," Barry said in the release.

In Q1, domestic gross profit rate was 23.4% versus 22.6% last year. The company also incurred $15 million in restructuring charges due to severance. Barry said the company "re-engineered" its workforce to increase the number of frontline associates and "removed leadership layers" elsewhere as consumers gravitate to in-store pickup.

For the fiscal year, the company reiterated its guidance for overall sales to drop between 3% and 0%.

Prior to the report, the stock was down roughly 7% year to date, compared to the 11% gain of the S&P 500 (^GSPC).

Shares of the company jumped more than 11% on Thursday morning following the report. Citi analyst Steven Zaccone said that "given the stock weakness year-to-date," he expects shares to trade "higher today based on the improved profitability."

Concerns around discretionary spending, as well as uncertainty around when the replacement cycle will begin, are clouding the outlook for the company.

Bank of America analyst Robert Ohmes, who maintains an Underperform rating on the stock, wrote in a client note that he expects "continued weakness in the appliance category given year-over-year declines in pricing and higher retail promotions as well as potential market share pressures from competitor Costco."

But there is optimism from Barry that innovation around AI could start the replacement cycle earlier, with products like AI-focused PCs and Samsung's AI-enabled phone.

"Those [AI products] tend to start at a higher price point; there's definitely a consumer who ... fundamentally believes that the value propositions of these devices will make them more productive," Barry said on the media call.

Preorders for AI laptops are "outpacing" early expectations "just a bit," though overall numbers are not high since consumers want to do their research and see the laptops in person. The HP (HPQ) EliteBook Ultra AI PC debuts June 18.

Barry added that as new products come out, typically at higher prices, the last generation could be marked down and become attractive to people looking to upgrade from older devices.

Yet it remains to be seen what the demand will be for the latest and greatest, as many AI applications still have limited adoption among average users.

Joe Feldman of Telsey Advisory Group wrote in a client note that he expects more momentum as "new technology hits the market" for back-to-school season.

Jonathan Matuszewski at Jefferies voiced a similar notion, saying the "replacement cycle [is] picking up steam," with customers looking at "consumer electronics, gaming consoles, home theater systems, and other related products."

Google Home display, manage all your compatible smart devices, Best Buy store, Queens, New York. (Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
Google Home display at a Best Buy store in Queens, New York. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images) (UCG via Getty Images)

Here's what Best Buy reported, compared to Wall Street estimates, per Bloomberg consensus:

Adjusted EPS: $1.20 versus $1.08

Net Sales: $8.85 billion versus $8.97 billion

Total US sales: -6.30% versus -5.02%

  • Appliances: -18.50% versus -9.92%

  • Entertainment: -11.30% versus -2%

  • Consumer electronics: -8.30% versus -6%

  • Computing and mobile phones: -2.20% versus -4.17%

International: -3.30% versus -3%

The company also shared its revenue outlook, which is expected to come in between $41.3 billion and $42.6 billion for the year.

For Q2, it expects same-store sales to decline by roughly 3%.

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

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