Best Buy Shares Rise 3% After Outlook Hiked, Holiday Confidence Bolstered

Best Buy Q3 2026 Earnings Report

Key Financial Results

Best Buy Co. (BBY) reported stronger-than-expected results for the third quarter of fiscal 2026, with earnings per share (EPS) of $1.40, surpassing the $1.30 analyst estimate. Revenue for the period reached $9.67 billion, exceeding the $9.57 billion forecast. The company also raised its full-year guidance, reflecting improved performance in key categories like computing, gaming, and mobile phones.

Comparable sales grew 2.7% overall, with domestic sales up 2.4% and online sales rising 3.5%. International sales surged by 6.3%, driven by strong performance in select markets. The company's CEO, Corie Barry, highlighted the strength of these results and noted the ongoing shift in consumer demand toward newer technology and replacement purchases.

Adjusted operating income for the quarter represented 4% of revenue, slightly above the prior year's 3.7%. Best Buy now expects FY26 adjusted operating income to be approximately 4.2% of total revenue.

Revised Guidance and Market Reaction

Best Buy raised its full-year revenue forecast to a range of $41.65 billion to $41.95 billion, up from the previous $41.1 billion to $41.9 billion. This represents a significant upgrade from earlier expectations and reflects confidence in the holiday shopping season. The company also lifted its EPS forecast to between $6.25 and $6.35, up from $6.15 to $6.30. The updated outlook now aligns closely with Wall Street's $6.26 consensus.

Shares of Best Buy rose more than 3% in premarket trading, signaling investor optimism. The stock has gained traction as the company's strategy of offering value-driven products, including its new Best Buy Marketplace, appears to be resonating with consumers according to analysts. Despite a 12% decline in 2025, Best Buy's shares outperformed broader market benchmarks like the S&P 500, which saw gains of 14% over the same period.

Consumer Trends and Strategic Moves

The third quarter results were buoyed by strong demand for new devices like the iPhone 17 and upgraded computing equipment. Shoppers are increasingly replacing technology purchased during the pandemic, particularly as they return to in-office work according to Bloomberg. Gaming and mobile phones, which make up a large portion of Best Buy's revenue, saw a 7.6% increase in sales during the quarter according to Bloomberg.

Best Buy has also made strategic moves to enhance its value proposition, including the launch of its Best Buy Marketplace. This new platform is designed to offer a broader range of products and services, further differentiating the company in a competitive retail landscape according to Seeking Alpha. The CEO emphasized the importance of adapting to shifting consumer needs and leveraging new product innovation to maintain growth.

Analyst and Investor Outlook

Analysts have noted that Best Buy's ability to raise its guidance is a positive sign amid a challenging retail environment. The company has navigated concerns about tariffs and rising prices by focusing on value and customer experience. Despite higher prices on certain items, Best Buy has managed to maintain demand through strategic pricing and product offerings according to the Wall Street Journal.

Wall Street's consensus remains a "Hold" for Best Buy, with a price target of $83.56. However, several firms have recently raised their price targets into the mid-$80s to $90s, reflecting growing optimism about the company's outlook. Investors will be closely watching the company's performance in the coming weeks, particularly as the holiday shopping season approaches.

Best Buy's ability to maintain its momentum will depend on several factors, including continued consumer interest in technology upgrades, effective inventory management, and the success of its Best Buy Marketplace. With the company's guidance now aligned with or exceeding expectations, the stock appears to be positioned for a strong finish to the fiscal year.