Best Buy returned to comparable sales growth (+0.5%) in fiscal 2026 on revenue of $41.7B; GAAP EPS rose 17.8% to $5.04 mainly on a smaller Best Buy Health write-down, while adjusted EPS rose under 1% to $6.43.
Revenue
$41.7B
+0.4% YoY
Net income
$1.1B
+15.3% YoY
Diluted EPS
$5.04
+17.8% YoY
Operating margin
3.3%
Overview
Best Buy's fiscal 2026 (the 52 weeks ended January 31, 2026) was a year of standing still on sales and inching forward on profit. Revenue rose 0.4% to $41.69 billion, and comparable sales — the change in sales at stores open at least 14 months plus online, which strips out the effect of opening or closing stores — grew 0.5%, the first annual increase after declines of 2.3% in fiscal 2025 and 6.8% in fiscal 2024.
The headline profit numbers look much better than that: net earnings rose 15.3% to $1.07 billion and diluted EPS rose 17.8% to $5.04. But almost all of that jump comes from a smaller one-off write-down than the year before, not from a stronger business. On the company's adjusted basis, which removes those one-off charges, EPS rose less than 1%, from $6.37 to $6.43.
Key metrics
Metric
FY2026
FY2025
YoY Change
Revenue
$41,691M
$41,528M
+0.4%
Comparable sales
+0.5%
(2.3%)
+2.8 pts
Gross profit rate
22.5%
22.6%
-0.1 pts
SG&A rate
18.3%
18.4%
-0.1 pts
Operating income
$1,389M
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Gross profit rate is the share of revenue left after paying for the goods sold; SG&A (selling, general and administrative expenses) rate is the share spent on running stores, staff, marketing and head office; operating margin is what is left of revenue after both, before interest and tax.
Why GAAP profit rose 18% while the business barely moved
Two unusual items sit between the reported and adjusted numbers:
Smaller impairment. A write-down (impairment) is an accounting charge that cuts the book value of an asset whose expected earnings have fallen. Best Buy took $171 million of goodwill and intangible-asset impairments on its Best Buy Health business in fiscal 2026, versus $475 million in fiscal 2025. The 10-K says a change in Best Buy Health's customer base in the third quarter triggered the review, and the write-down reflects lower expected growth and margins, "in part due to pressures in the Medicaid and Medicare Advantage markets." A further $21 million of Best Buy Health long-lived asset impairments sat inside SG&A.
Bigger restructuring. Restructuring charges were $190 million, against a $3 million credit a year earlier. They mainly relate to a labor and store optimization program started in the second quarter and a Best Buy Health restructuring started in the first quarter, which included exiting part of that business and "significant changes to reduce our exposure to tariffs, particularly in China."
Net of these, the 10-K attributes the rise in operating margin "primarily" to lower impairments, partly offset by higher restructuring charges. A lower tax rate added to the EPS gain: the effective tax rate fell from 28.7% to 24.0%, mostly because the prior year's Best Buy Health goodwill write-down was not tax-deductible. Share count also helped modestly — diluted shares fell from 216.6 million to 212.1 million.
Takeaway: The 17.8% jump in reported EPS is mostly an accounting comparison — a $475 million write-down last year versus $171 million this year — while adjusted EPS rose under 1% on flat sales. The real story of fiscal 2026 is that Best Buy stopped shrinking and held its margins while changing where its profit comes from: less from selling products, more from advertising and its new online marketplace.
Domestic segment (92% of revenue)
Domestic revenue was essentially flat at $38.28 billion (+0.1%), with comparable sales up 0.4%. Online revenue rose to $13.17 billion, 34.4% of the segment, with comparable online sales up 1.3%.
Category
Share of revenue FY26
Share FY25
Comparable sales FY26
FY25
Computing and Mobile Phones
47%
45%
+5.7%
+3.4%
Consumer Electronics
28%
29%
(5.4%)
(5.2%)
Appliances
11%
12%
(8.9%)
(14.8%)
Entertainment
7%
7%
+6.8%
(11.9%)
Services
6%
6%
+1.0%
+8.4%
Total
100%
100%
+0.4%
(2.5%)
The mix split is stark. Laptops, phones and desktops drove computing up 5.7%, and gaming lifted Entertainment 6.8% after an 11.9% drop the year before. Against that, home theater pulled Consumer Electronics down 5.4% and large appliances pulled Appliances down 8.9% — the third straight year of weakness in the big-ticket home categories. Computing and phones now make up almost half of domestic sales.
Margins. The domestic gross profit rate was unchanged at 22.6%, but the pieces underneath moved in opposite directions: the 10-K cites "lower product margin rates, mostly offset by rate improvement within the services category and growth in Best Buy Ads" (the company's retail advertising business, which sells ad placements to brands on its website, app and stores). Adjusted SG&A fell $34 million to $6.97 billion (18.2% of revenue, from 18.3%), helped by lower Best Buy Health costs, lower depreciation and favorable indirect-tax resolutions, "mostly offset" by spending on Best Buy Ads and the new Best Buy Marketplace (third-party sellers listing on BestBuy.com). The domestic adjusted operating margin edged up from 4.3% to 4.4%.
International segment (Canada, 8% of revenue)
International revenue rose 3.7% to $3.41 billion, faster than the company overall, with comparable sales up 2.3%. Part of the revenue gain came from Best Buy Express locations (leased by Bell Canada) that aren't yet in the comparable base, and a weaker Canadian dollar worked against it. Computing and mobile phones (+5.5% comparable) and services (+5.2%) led.
The gross profit rate fell from 22.4% to 21.6% on lower product margins and higher supply-chain costs, but higher volumes spread fixed costs further: the adjusted SG&A rate dropped from 19.1% to 18.2%, lifting the segment's adjusted operating margin from 3.3% to 3.4%.
Stores, cash and capital returns
Store count fell by 49 to 1,068. Most of the closures were small formats: Yardbird furniture stores went from 21 to 2, Canada Best Buy Mobile stand-alone stores from 31 to 12, and Outlet Centers from 25 to 18. Large-format Best Buy stores in the US slipped from 891 to 886, and the company said it expects to add about 4 of them in fiscal 2027.
Cash flow. Operating cash flow fell to $1.96 billion from $2.10 billion, which the 10-K puts down to the timing of payments to suppliers. After $704 million of capital expenditures (investment in stores, technology and supply chain), that leaves about $1.26 billion of free cash flow (our calculation).
Shareholder returns. Best Buy paid $801 million in dividends ($3.80 per share for the year) and bought back $273 million of stock, down from $500 million — together about $1.07 billion. Year-end cash was $1.74 billion against $1.15 billion of notes due 2028 and 2030.
Tariffs
Best Buy directly imports only about 1%–3% of what it sells, but its suppliers bring in most of the rest from China, Mexico and Southeast Asia, so tariffs hit its costs indirectly through vendor prices. During fiscal 2026 tariffs imposed under the International Emergency Economic Powers Act (IEEPA) applied to the company's own-brand and directly imported products. On February 20, 2026, after the fiscal year closed, the U.S. Supreme Court ruled those IEEPA tariffs unauthorized; the 10-K says whether and when refunds would be paid was still uncertain, and that the government had started other trade actions that could bring new tariffs.
Outlook
Initial fiscal 2027 guidance (from the fourth-quarter earnings release, Exhibit 99.1 to the March 3, 2026 8-K): revenue of $41.2–$42.1 billion, comparable sales of -1.0% to +1.0%, an adjusted operating margin of 4.3%–4.4%, adjusted EPS of $6.30–$6.60 and capital spending of about $750 million, plus about $300 million of buybacks. The CFO described a "mixed macro environment." The same release showed the fourth quarter itself was softer than the full year: comparable sales fell 0.8%, which the CEO put down to "slightly softer customer demand for our industry during the holiday quarter."
Latest quarter filed — Q2 fiscal 2027 (13 weeks ended August 1, 2026, per the 10-Q filed September 4, 2026): results have run well ahead of that initial guidance.
Q2 FY27 (10-Q)
Q2 FY27
Q2 FY26
Change
Revenue
$9,779M
$9,438M
+3.6%
Comparable sales
+4.1%
+1.6%
—
Gross profit rate
23.9%
23.2%
+0.7 pts
Operating margin
4.3%
2.7%
+1.6 pts
Net earnings
$315M
$186M
+69%
Diluted EPS
$1.48
$0.87
+70%
The 10-Q attributes comparable sales growth to computing, home theater, AI glasses and trading cards, partly offset by a decline in traditional gaming. Home theater turning into a growth driver is the notable change from fiscal 2026. The domestic gross margin gained from Marketplace and Best Buy Ads growth and $34 million of IEEPA tariff refunds, recorded as lower cost of sales; the 10-Q adds that a further $41 million was refunded on September 2, 2026 and will be booked in the third quarter, and that together these represent substantially all of the refunds the company has requested. Much of the year-on-year EPS jump comes from lapping $114 million of restructuring charges in last year's second quarter.
In the second-quarter earnings release (8-K Exhibit 99.1, August 27, 2026), Best Buy raised fiscal 2027 guidance to revenue of $42.3–$42.8 billion, comparable sales of +1.9% to +3.0%, an adjusted operating margin of 4.4%–4.5% and adjusted EPS of $6.70–$6.90, and guided third-quarter comparable sales to +1.0% to +3.0%. The same release names Jason Bonfig as incoming CEO, effective November 1, 2026, succeeding Corie Barry.
Our read: Fiscal 2026 showed Best Buy could hold margins on flat sales by moving mix toward higher-margin advertising, marketplace and services income while product margins kept slipping. The first half of fiscal 2027 adds actual sales growth on top. Two cautions for the rest of the year: the tariff refunds ($34 million in Q2, $41 million coming in Q3) are one-time gains that flatter gross margin and won't recur, and product margin rates are still falling — so the durability of the margin gains depends on Ads and Marketplace continuing to grow faster than the core product business weakens. A CEO handover in November, at the start of the holiday quarter — which produced about half of fiscal 2026's earnings ($2.56 of the $5.04 diluted EPS) — adds execution risk.