Best Buy Co. (NYSE: BBY) plunged 5.31% in pre-market trading on Tuesday, following the release of its fourth-quarter earnings report. Despite beating Wall Street's estimates for earnings and revenue, the consumer electronics retailer's outlook for the upcoming fiscal year was muted, reflecting continued weakness in consumer demand for big-ticket purchases.

For the fourth quarter ended February 1, 2025, Best Buy reported adjusted earnings of $2.58 per share, surpassing analysts' expectations of $2.40 per share. However, revenue fell 4.9% year-over-year to $13.95 billion, although it still exceeded forecasts of $13.66 billion.

The company's comparable sales increased by 0.5% during the quarter, snapping a streak of 12 consecutive quarters of declines. However, this growth was driven by strong demand for computing, tablets, and services, while categories like appliances, home theater equipment, and gaming saw declines.

Looking ahead, Best Buy forecasts fiscal 2026 comparable sales growth in the range of flat to 2%, compared to analysts' expectations of a 1.7% rise. The retailer's adjusted earnings per share guidance of $6.20 to $6.60 also fell short of the consensus estimate of $6.58. Notably, Best Buy's guidance does not include the impact of recently implemented or proposed tariffs, which could further pressure consumer spending on electronics.

Chief Financial Officer Matt Bilunas acknowledged the ongoing challenges posed by high inflation, stating that consumers remain "value focused and thoughtful about big ticket purchases." This cautious consumer behavior is expected to persist throughout the year, weighing on Best Buy's growth prospects.