Best Buy Stock Falls After Earnings Beat. Why Wall Street’s Disappointed.

Best Buy’s same-store sales rose 1.6% in the quarter compared with a year ago. (Scott Olson/Getty Images)

Best Buy’s fiscal second quarter topped Wall Street’s expectations on nearly all fronts, with the electronics retailer notching its strongest same-store sales growth in years.

Yet the stock was lower in premarket trading Thursday, reflecting investors’ disappointment that the company did not raise guidance for the full year.

For the quarter ended Aug. 2, Best Buy reported adjusted earnings of $1.28 a share on $9.44 billion in revenue. Analysts polled by FactSet were expecting earnings of $1.21 per share on $9.23 billion.

Same-store sales grew 1.6% from a year ago in the quarter, topping consensus estimates for a 0.5% decline and marking the company’s highest growth in three years, said CEO Corie Barry.

“This better-than-expected sales growth was driven by a mix of new technology innovation, our relentless focus on a seamless omni-channel customer experience and our strong vendor partnerships,” she added.

The company expects same-store sales to grow at a similar pace in the third quarter, compared with analysts’ expectations for sales growth to be flat.

Shares of Best Buy were 1% lower at $74.61 in premarket trading Thursday, likely reflecting the market’s disappointment that the company reiterated—rather than raised—its guidance for the full year, citing tariff uncertainty.

The company continues to expect revenue to range between $41.1 billion to $41.9 billion. Adjusted earnings per share are projected to range from $6.15 to $6.30. Wall Street had penciled in $6.16 in earnings on $41.4 billion in revenue for the year.

Write to Sabrina Escobar at sabrina.escobar@barrons.com