Best Buy Falls Short As Shoppers Hold Off: Analysts Say Tariffs, Tech Slow Sales

On Thursday, Best Buy Co Inc (NYSE:BBY) reported that first-quarter 2026 earnings fell short of expectations.

The company's first-quarter sales fell around 1% (comparable sales fell 0.7%) year over year to $8.77 billion. They missed the analyst consensus estimate of $9.22 billion.

“Today we are updating our full year guidance to incorporate the impact of tariffs,” said Matt Bilunas, Best Buy CFO. The retailer now expects annual comparable sales growth to be up-or-down 1%. The adjusted operating income rate will likely be similar to last year at approximately 4.2%.

For Q2 FY26, Bilunas expects comparable sales to be slightly down to last year. He added that the company's adjusted operating income rate will be approximately 3.6.

Also Read: Goldman Sachs Sees Upside In Retail Giants Dollar Tree, Home Depot, Best Buy And Target

Best Buy lowered its fiscal 2026 adjusted earnings from $6.20-$6.60 per share to $6.15-$6.30 per share versus consensus of $6.13 per share.

The company lowered its sales guidance from $41.4 billion to $42.2 billion to $41.1 billion to $41.9 billion. The consensus hovers around $41.44 billion.

Guggenheim Securities writes: “We believe BBY’s 1Q 2025 operating results provide support behind our 2025 framework.”

• Analyst Steven Forbes reiterated the Buy rating and a price target of $90. Here’s what other

Wedbush on Friday lowered its price target from $75 to $70 while maintaining a Neutral rating.

• Analyst Matthew McCartney says the revised outlook embeds consumer behavior and remains relatively consistent through the year. Value-focused shoppers remain “willing to make big-ticket purchases if they need to or when they see compelling technology.” The firm expects a “much more compelling valuation following Thursday’s sell-off.”

Piper Sandler lowered its price target from $92 to $82 on Thursday, keeping an overweight rating.

• Analyst Peter J. Keith writes, “To the positive, the impact from tariffs was less than expected and appears manageable – albeit with some price increases that could negatively impact consumer demand in 2H. For product innovation, while the new product pipeline has the Nintendo Switch 2 in June and discontinuing support for Windows 10 in October, the overall innovation outlook appears somewhat subdued.”

KeyBanc Capital Markets on Thursday wrote Best Buy’s Q1 results reflect continued headwinds within the consumer electronics industry. It reiterates the Sector Weight rating.

• Analyst Bradley Thomas writes, “While we are encouraged with the updated guidance and management's initiatives, we believe there remains risk to comps in 2H as comparisons become more difficult and have uncertainty around demand destruction related to price increases.”

Truist Securities on Thursday reiterated Neutral rating on Best Buy, increasing the price target from $64 to $69 with a relatively balanced risk/reward.

• Analyst Scot Ciccarelli writes, “Despite the benign projections on tariffs, sales momentum remains muted and we are looking at the 3rd straight yr of flattish earnings.”

Telsey Advisory on Friday wrote, “Although uncertainty remains with tariffs, given the ongoing court process governing their legality and negotiations between the US and other countries, we expect Best Buy to come out of the current environment on top within the consumer electronics space based on the company’s ability to leverage its scale and manage costs well.”

• Analyst Joseph Feldman maintains an Outperform rating, with a price target of $90.

Price Action: BBY stock is up 0.36% at $66.56 at the last check on Friday.

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