Best Buy Raises Sales Outlook on AI Product Demand
Best Buy forecast second-quarter sales above Wall Street estimates on Thursday, citing strong demand for AI-powered smartphones, gaming consoles, and growth in its advertising and marketplace channels. The retailer's stock surged 18% on the earnings beat.
The company reported comparable sales rose 2% in the quarter ended May 3, above analyst expectations of about 1%. Profit reached $1.28 per share, topping the estimate of $1.23.
What's Driving Growth
Best Buy is focusing on fast-growing categories including AI glasses, 3D printers, and collectibles. The company is also partnering with OpenAI and Google to position itself around emerging technology.
May sales climbed at a high-single-digit pace but are expected to slow to about 1% in the current quarter, following last year's strong Nintendo Switch 2 launch. That still beats analyst expectations of a 0.4% decline.
Shoppers remain cautious about big-ticket purchases due to rising fuel costs, but continue spending on higher-priced items driven by replacement needs or new technology.
Supply Chain and Pricing
Best Buy pulled forward imports during the quarter to address a global memory chip shortage tied to AI-driven demand. CFO Matt Bilunas said on the earnings call: "At this point, we do not see indications of material inventory supply constraints for the rest of FY27."
The company expects limited demand impact from product price hikes in the current quarter as customers adjust purchases across price tiers to stay within budget.
Leadership and Strategy
Incoming CEO Bonfig, who takes over in November, plans to sharpen focus on retail media and technology platforms while expanding marketplace offerings. The company maintained its fiscal 2027 forecast of comparable sales between a 1% decline and a 1% rise, with adjusted profit per share between $6.30 and $6.60.
Michael Ashley Schulman, partner at Cerity Partners, said the next 12 months could be a sweet spot for AI-driven hardware upgrades as early-generation AI PCs decline in price. HP reported this week that AI PC shipments now account for 44% of its total PC shipments in the second quarter, up from more than 35% in the previous quarter.
Best Buy's stock remains down about 10% over the past 12 months amid stiffer retail competition and cautious consumer spending.
For sales professionals: Best Buy's results underscore how AI adoption is reshaping product demand and customer purchasing patterns. Understanding these shifts can inform your approach to AI for Sales strategies and revenue opportunities. Learn more about how to apply these insights through the AI Learning Path for Sales Representatives.
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