By Angela Christy M
Aug 27 (Reuters) - Best Buy raised its full-year forecasts on Thursday on expectations of AI-driven device upgrades and advertising growth, but its shares fell 6% as investors looked past a tariff-refund boost and booked profits after a recent rally.
The top U.S. electronics retailer has sharpened its focus on fast-growing categories including AI glasses, 3D printers and collectibles, as sales of appliances, such as refrigerators, washing machines and dishwashers, have remained
under pressure.
"While customers continue to be thoughtful about big-ticket purchases, they are willing to spend on high-price-point products when they need to or when there is technology innovation," said outgoing CEO Corie Barry.
A strained housing market was forcing customers to opt for replacement of big appliances at competitive price points.
The company also flagged a drag from higher fuel costs on its margins in the back half of 2026.
U.S. retailers have signaled during the latest earnings season how consumers, squeezed by higher fuel prices and elevated food costs, have cut back spending on large discretionary purchases.
Best Buy also raised its annual profit forecast, but that was driven mostly by a tariff refund of about $34 million.
The company's shares have risen about 30% so far this year through the last close, as investors bought into signs of a revival at the retailer from demand for pricier AI-powered gadgets from affluent consumers.
Best Buy is preparing for a leadership transition, with company veteran Jason Bonfig set to become the CEO later in the year, succeeding Corie Barry. The retailer has also named industry expert Anne Bramman as its new finance chief.
Memory chip prices have been rising as AI data-center demand tightens supply, creating cost pressure for Best Buy and its suppliers.
The higher costs of memory chips led to a mid-single-digit rise in average selling prices in the quarter, while the decline in units sold was in the high single digits, incoming CEO Bonfig said on a post-earnings call.
The top U.S. electronics retailer expects annual revenue of $42.3 billion to $42.8 billion, compared with its earlier forecast of $41.2 billion to $42.1 billion.
The company projected fiscal comparable sales growth of 1.9% to 3%, up from its previous forecast range of a decline of 1% to a growth of 1%.
Best Buy is building its higher-margin marketplace and advertising businesses to help cushion fluctuations in sales from uneven consumer spending.
Second-quarter adjusted earnings per share of $1.47 beat estimates of $1.38, according to data compiled by LSEG.
Best Buy expects annual earnings per share of $6.70 to $6.90, compared with the $6.30 to $6.60 estimated earlier.
(Reporting by Angela Christy and Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)
