03:13 PM EST, 11/25/2025 (MT Newswires) -- Best Buy ( BBY ) posted the strongest increase in domestic comparable sales in about four years amid improvements in key categories, though a promotional environment could cap gains in future earnings, Truist Securities said Tuesday.

Earlier in the day, the electronics retailer reported US same-store sales growth of 2.4% for its fiscal third quarter, rebounding from a 2.8% drop a year earlier. Overall comparable sales clocked in at a stronger-than-expected 2.7%.

"We continue to drive strong sales performance across computing, gaming, and mobile phones," Chief Executive Corie Barry said on a conference call, according to a FactSet transcript. "We also saw growth in other categories, including wearables and headphones. This growth was partially offset by declines in the home theater, appliance, and drone categories."

While the 2.4% jump in US comparable sales was below Truist's 3% growth estimate, it marked the strongest performance in four years, according to the brokerage.

Domestic computers and mobile phone sales, which now make up about half of the overall tally, rose 7.6%, while the TV category improved sequentially, though it was down year over year, Truist Managing Director Scot Ciccarelli said in a note to clients.

"As the company faces fewer sales drags, we should see improving top-line performance," Ciccarelli said.

Third-quarter adjusted earnings of $1.40 per share and revenue of $9.67 billion topped estimates on FactSet.

However, Best Buy ( BBY ) expects the gross profit rate to decline year over year in the fourth quarter amid "increased promotional investments," Chief Financial and Strategy Officer Matt Bilunas told analysts. The company expects holiday-quarter comparable sales to be down 1% to up 1%.

"Our sense is that promos and financing discounts may keep a lid on earnings given Best Buy's ( BBY ) typical 'premium' positioning in the market relative to the 'value' focus by a growing number of consumers," Truist's Ciccarelli said. "We still suspect a more sustainable new/refresh product cycle will be needed to drive notable earnings growth/multiple expansion."

Best Buy ( BBY ) upgraded its fiscal 2026 outlook, now seeing adjusted EPS of $6.25 to $6.35 on revenue between $41.65 billion and $41.95 billion. Analysts polled by FactSet expect adjusted EPS of $6.25 and revenue of $41.79 billion.

Truist lifted its price target on the retailer's stock to $84 from $79, while maintaining a hold rating.

Best Buy ( BBY ) shares advanced 5.2% in Tuesday late-afternoon trade, but are down 7.3% so far this year.

Price: 79.85, Change: +4.22, Percent Change: +5.59