Best Buy's (NYSE:BBY) Q3 FY25 earnings report wasn't exactly what investors were hoping for, dragging its share price down nearly 9% this morning. Revenue slid to $9.45 billionmissing Wall Street's $9.63 billion target and falling from $9.76 billion a year ago. Adjusted EPS? $1.26, shy of the $1.30 analysts had penciled in. Same-store sales fell 2.9%, marking a twelfth straight quarterly decline, though better than last year's 6.9% drop. CEO Corie Barry chalked up the underperformance to election distractions, cautious consumer spending on non-essentials, and overall economic jitters. But there's a silver lining: early Q4 sales, driven by Black Friday promos, show promise as shoppers return for holiday deals.

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On the bright side, Best Buy's gross profit margin in its domestic segment edged up to 23.6%, thanks to strong performance in services like Geek Squad and its growing health offerings. Online sales stayed resilient, comprising 31.4% of domestic revenue, up from 30.6% last year. But challenges in big-ticket items like appliances and home theater dragged down results, with macroeconomic uncertainty taking its toll on discretionary spending. Adjusting to these realities, Best Buy narrowed its FY25 revenue forecast to $41.1 billion-$41.5 billion and trimmed EPS guidance to $6.10-$6.25, signaling caution as it eyes uneven customer behavior heading into the year-end.

Still, Best Buy's team is banking on holiday momentum. Early Black Friday deals have been a hit, and Barry says consumers are opening their wallets for high-priced tech and compelling new gadgets. With a sharpened focus on omnichannel innovation, store upgrades, and its service ecosystem, Best Buy is playing the long game. The near-term road may look bumpy, but as they double down on strategic pivots, the retailer is positioning itself to navigate today's headwinds and emerge stronger for tomorrow's opportunities.

This article first appeared on GuruFocus.