Best Buy tops quarterly estimates on Nintendo Switch gross sales, AI tech demand

By Savyata Mishra

(Reuters) -Best Buy topped Wall Street estimates for second-quarter outcomes on Thursday, pushed by robust gross sales of Nintendo Switch gaming consoles and a surge in demand for synthetic intelligence-powered computer systems and cell phones.

However, the highest U.S. electronics retailer caught to its annual gross sales and revenue forecasts, citing tariff-induced uncertainty within the second half of the 12 months.

The firm, which has struggled with declining gross sales over the previous three years, bought a lift from the June launch of the Switch 2, which was closely pre-ordered at each its bodily and on-line shops.

CEO Corie Barry mentioned the gross sales momentum continued into August as spending remained resilient, though prospects had change into extra deal-focused and waited for purchasing occasions similar to Black Friday and back-to-school promotions.

“Big-ticket purchases are approached more carefully, though consumers continue to spend on expensive technology when there is a clear need or innovation,” Barry mentioned on a post-earnings name.

On a media name with journalists, Barry mentioned that the White House had been open to suggestions from Corporate America on the affect of tariffs.

Best Buy, which sources most of its items from China, is trying to soften the hit from tariffs by elevating costs on some gadgets.

“Tariffs and a pullback in discretionary big-ticket categories remain a drag, and unlike general merchandise (retailers), Best Buy has limited fallback categories to absorb that pressure,” Emarketer analyst Suzy Davidkhanian mentioned.

Company executives on Thursday mentioned the worth hikes have been decrease than the general charge of tariffs, owing to its mitigation methods similar to provider price negotiation.

Comparable gross sales for the quarter ended August 2 rose 1.6%, its largest enhance in three years. Analysts on common had anticipated a 0.52% drop, in line with information compiled by LSEG.

On an adjusted foundation, it earned $1.28 per share, in contrast with the estimates of $1.21 per share.

The firm expects comparable gross sales for fiscal 12 months 2026 to vary between a 1% drop and a 1% rise and an adjusted revenue of between $6.15 and $6.30 per share.

(Reporting by Savyata Mishra in Bengaluru; Editing by Anil D’Silva)