Best Buy Co Inc ( BBY ) is trading lower Thursday after the retailer’s first-quarter 2026 earnings fell short of expectations.

The company’s first-quarter sales fell around 1% (comparable sales fell 0.7%) year over year to $8.77 billion. It missed the analyst consensus estimate of $9.22 billion.

Domestic revenue of $8.13 billion decreased 0.9%, primarily due to a 0.7% decline in comparable sales.

The largest drivers of the comparable sales decline on a weighted basis were home theater, appliances, and drones, partially offset by growth in the computing, mobile phone, and tablet categories.

Domestic online revenue of $2.58 billion increased 2.1% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was 31.7% versus 30.8% last year..

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The gross profit margin remained unchanged at 23%, and the operating margin fell from 3.5% to 2.5%.

Best Buy ( BBY ) reported adjusted earnings of $1.15, missing the consensus of $1.31.

Corie Barry, Best Buy ( BBY ) CEO, said the company “delivered in-line revenue and better-than-expected adjusted operating income."

Outlook: "Today we are updating our full year guidance to incorporate the impact of tariffs," said Matt Bilunas, Best Buy CFO. "We expect annual comparable sales growth to be in the range of down 1% to up 1%, and our adjusted operating income rate to be similar to last year at approximately 4.2%.

For Q2 FY26, Bilunas expects comparable sales to be slightly down to last year. He added that the company’s adjusted operating income rate will be approximately 3.6.

Best Buy ( BBY ) lowered its fiscal 2026 adjusted earnings from $6.20-$6.60 per share to $6.15-$6.30 per share versus consensus of $6.13 per share.

The company lowered its sales guidance from $41.4 billion to $42.2 billion to $41.1 billion to $41.9 billion. The consensus hovers around $41.44 billion.

The guidance reflects comparable sales of (1.0%) to 1.0% compared to prior guidance of 0.0% to 2.0%.

Adjusted operating income rate of approximately 4.2%, compared to prior guidance of 4.2% to 4.4%.

Price Action: BBY stock is trading 2.54% lower at $69.70 in premarket at the last check Thursday.

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