To The Moon

$Best Buy(BBY)$ will be reporting its fiscal Q4 2025 for period ending 31 Jan 2025 on 04 March 2025 after market close.

BBY is expected to show a fall in quarterly revenue which will represent a 6.4% decrease in revenue to $13.702 billion from $14.65 billion compared to same period one year ago.

Analysts is anticipating the consensus estimate for earnings to come in at $2.40 per share.

BestBuy (BBY) Last Neutral Earnings Call Saw A -2.31% Change

BBY last neutral earnings call on 26 Nov 2024 saw its share price experience a negative 2.31% change.

The earnings call highlighted strong performance in the computing and tablet categories, successful early holiday sales, and significant improvements in employee engagement and services gross profit rates. However, challenges such as a decline in comparable sales, revenue, and operating income rate, as well as underperformance in key categories like appliances and home theater, balanced the positive aspects.

BestBuy (BBY) Guidance On Pricing Strategy And Fulfillment Options

During Best Buy's Q3 2025 earnings call, the company provided detailed guidance and metrics related to their financial performance and future outlook. The company reported a non-GAAP operating income rate of 3.7% on revenue of $9.4 billion, while comparable sales declined by 2.5% against a guidance of approximately 1% decline. Their gross margin rate expanded by 6 basis points, attributed to improvements in membership and services offers. Online sales in Q3 reached $2.7 billion, accounting for 31% of domestic revenue, with 45% of digital sales picked up by customers. Looking ahead, Best Buy adjusted their Q4 comparable sales outlook to range from flat to a decline of 3%, maintaining their full-year non-GAAP operating income rate guidance between 4.1% and 4.2%.

The company aims to capitalize on consumer demand during the holiday season, with a focus on computing and tablets, which saw a 5.2% growth, and laptops specifically increasing by 7%. Despite challenges, Best Buy highlighted strategic investments in pricing, promotional efforts, and fulfillment options to maintain their competitive position.

Factors That Could Affect BBY fiscal Q4 2025 Earnings

There are several factors that investors would be looking at for BBY fiscal Q4 2025 earnings, as one of the important factor would be the consumer spending as the overall economic conditions have been changing.

Earnings Expectations: Analysts have provided forecasts, with a consensus EPS forecast around $2.39. It's important to note that this is a forecast, and actual results can differ. There are expectations of a year over year decrease in EPS.

In Q3, Best Buy Q3 online sales reached $2.7 billion, representing 31% of Domestic revenue. 45% of these sales were picked up by customers, with over 90% of orders available within 30 minutes. Computing and tablet categories posted a comparable sales growth of 5.2% year-over-year, with laptops specifically increasing by 7% in the third quarter.

Something we might need to take note is in Q3, non-GAAP diluted earnings per share decreased 2% to $1.26 compared to the same period last year.

Market Conditions: Consumer spending on electronics is influenced by overall economic conditions. Factors like inflation and interest rates play a significant role. There are ongoing challenges in key categories like appliances, home theater, and gaming.

In Q3, domestic gross profit rate increased by 70 basis points mainly due to improvements in the Services category and membership offerings.But Q3 comparable sales declined 2.5%, with overall softer-than-expected customer demand in September and October attributed to macro uncertainty and election distractions.

Declines were noted in appliances, home theater, and gaming categories, offsetting growth in computing and tablet sales.

Company Performance: Best Buy's ability to adapt to changing consumer preferences and maintain its market share is crucial. The company's focus on its omnichannel strategy (online and in-store) is also a key factor. Best buy has adjusted their Q4 comparable sales outlook to range from flat to a decline of 3%.

In the previous quarter, enterprise comparable sales for the first 3 weeks of November are up approximately 5% over last year, driven by early Black Friday sales and promotional strategies, but we need to understand that enterprise revenue of $9.4 billion declined 2.9% on a comparable basis, and non-GAAP operating income rate of 3.7% declined 10 basis points compared to last year.

Employee turnover rate is the lowest in over 3 years, and the company engagement score increased in Q3.

BestBuy (BBY) Price Target

Based on 10 Wall Street analysts offering 12 month price targets for Best Buy Co in the last 3 months. The average price target is $100.70 with a high forecast of $115.00 and a low forecast of $80.00. The average price target represents a 12.00% change from the last price of $89.91.

There are already some challenges in consumer spending for Best Buy in Q3, this might spilled over, but one thing that could boost Best Buy in its fiscal Q4, would be the holiday season spending, but could the customer demand improved significantly compared to September and October figures which was attributed to macro uncertainty and election distractions.

Technical Analysis - Exponential Moving Average (EMA)

We could see that BBY have been able to hold out the 12-EMA for short term daily uptrend, the only thing to note is BBY is still trading in a sideways, which could mean investors are still seeking the momentum for the market.

If we look at the RSI, we could be seeing an attempt to improved momentum, but we need the figure to go closer to overbought region for a clearer signal for strong momentum.

I would be watching this stock as I am expecting consumer stocks to have a nice gains in coming months as U.S. consumer grapple with tariffs for imported goods, they might turn to domestic brands, especially for electronic brands.

Summary

Analyst sentiment is cautiously optimistic as Best Buy is navigating a challenging consumer electronics market. As investors, I feel that we need to watch this fiscal Q4 2025 earnings closely to see how Best Buy has managed the challenges it faced in previous reported quarter.

Appreciate if you could share your thoughts in the comment section whether you think Best Buy would be able to overcome the challenges and provide an earnings surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.