As consumer electronics retailers navigate an increasingly competitive landscape, companies like Best Buy Co., Inc. (NYSE:BBY) face mounting challenges in maintaining profitability. Amid shifting consumer preferences and the pressure of industry-wide promotions, investors and analysts closely watch financial performance and strategic moves to gauge future prospects.
Best Buy shares are trading lower on Wednesday as BofA Securities analyst Robert F. Ohmes reiterated the Underperform rating on the stock, with a price forecast of $63.
The company will report second-quarter earnings on Aug. 28, and Ohmes expects EPS to be $1.23 and enterprise comps to be -0.3%, both close to consensus.
The analyst said he models the second-quarter gross margin at 23.5%, unchanged from last year, as Best Buy has already cycled past the benefit from the Geek Squad headcount reduction seen in the first quarter of fiscal 2026.
Also Read: Why Best Buy’s Appliance Sales Can’t Keep Up With Rivals
He noted that selling Current Health should ease margin pressure tied to the slow adoption of hospital-at-home solutions.
Online sales are still outpacing in-store purchases, which could weigh on margins since in-store purchases typically carry higher warranty attachment rates.
Ohmes projects 45 basis points of SG&A deleverage, primarily due to the lapping of a $20 million legal settlement benefit and lower medical claims.
He added that appliance and consumer electronics sales remain highly promotional, with average discounts of 13% in the second quarter. However, the marketplace launch, which is expected to expand to approximately 500 vendors, along with retail media growth, should add incremental profit and be margin-accretive in FY26.
BBY Price Action: Best Buy Co shares were down 2.16% at $72.50 at the time of publication on Wednesday, according to Benzinga Pro data.
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