Best Buy on Thursday raised its full-year financial forecast, driven by anticipated growth in sales of artificial intelligence (AI)-enabled devices and increased advertising revenue. Despite the upbeat outlook, the retailer’s shares declined 4.5 percent as investors took profits following a recent rally and appeared to look beyond a lift provided by tariff refunds.

The company highlighted its strategic emphasis on rapidly expanding product categories, including AI-powered smart glasses, 3-D printers, and collectible items, amid ongoing challenges in the sales of traditional household appliances such as refrigerators, washing machines, and dishwashers. These larger appliances have continued to experience subdued demand, reflecting cautious consumer spending habits in the broader market.

“While customers continue to be thoughtful about big-ticket purchases, they are willing to spend on high-price-point products when they need to or when there is technology innovation,” commented Corie Barry, Best Buy’s outgoing chief executive.

Analysts noted that despite the positive forecast update, investors had expected stronger financial results from the company’s recent quarter, which may have contributed to the stock’s pullback. Steven Zaccone, an analyst at Citi, suggested that the market’s reaction reflected tempered expectations rather than concerns about the company’s future prospects.

Best Buy’s forward-looking guidance underscores the company’s pivot toward innovation-driven consumer electronics as it seeks to offset the slowdown in appliance sales. The emphasis on AI-enhanced devices aligns with broader industry trends, where emerging technologies are reshaping consumer preferences and spending patterns.