Best Buy Co., Inc.
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Item 1. Business.
Unless the context otherwise requires, the terms “we,” “us,” “our” and the “company” in this Annual Report on Form 10-K refer to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. Any references to our website addresses do not constitute incorporation by reference of the information contained on the websites.
Description of Business
We were incorporated in the state of Minnesota in 1966. We are driven by our purpose to enrich lives through technology and our vision to personalize and humanize technology solutions for every stage of life. We accomplish this by leveraging our unique combination of tech expertise and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes. We have operations in the U.S. and Canada.
Segments and Geographic Areas
We have two reportable segments: Domestic and International. The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Lively, Jitterbug, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, lively.com, techliquidators.com and yardbird.com. Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Express, Best Buy Marketplace, Best Buy Mobile, Geek Squad, Insignia and TechLiquidators and the domain names bestbuy.ca and techliquidators.ca.
Operations
Our Domestic and International segments are managed by leadership teams responsible for all areas of the business. Both segments operate an omnichannel platform that allows customers to come to us online, visit our stores or invite us into their homes.
Development of merchandise and service offerings, pricing and promotions, procurement and supply chain, online and mobile application operations, marketing and advertising and labor deployment across all channels are centrally managed. In addition, support capabilities (for example, human resources, finance, information technology and real estate management) operate primarily from our corporate headquarters. We also have field operations that support retail, services and in-home teams primarily from our corporate headquarters and regional locations. Our retail stores have procedures for inventory management, asset protection, transaction processing, customer relations, store administration, product sales and services, staff training and merchandise display that are largely standardized. All stores generally operate under standard procedures with a degree of flexibility for store management to address certain local market characteristics. While day-to-day operations of our stores are led by store management, more strategic decisions regarding, for example, store locations, format, category assortment and fulfillment strategy, are led by our corporate teams with input from market or regional leadership.
Merchandise and Services
Our Domestic and International segments have offerings in six revenue categories. The key components of each revenue category are as follows:
•Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches);
•Consumer Electronics - digital imaging, health and fitness products, home theater (including home theater accessories, soundbars and televisions), portable audio (including headphones and portable speakers) and smart home;
•Appliances - large appliances (including dishwashers, laundry, ovens and refrigerators) and small appliances (including blenders, coffee makers, vacuums and personal care);
•Entertainment - drones, gaming (including hardware, peripherals and software, as well as augmented reality glasses), toys, virtual reality and other software;
•Services - advertising, delivery, health-related services, installation, marketplace commissions, memberships, repair, set-up, technical support, warranty-related services; and
•Other - other product offerings, including baby, food and beverage and outdoor living.
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Distribution
Customers within our Domestic segment who purchase product online have the choice to have product delivered, or pick up product from a Best Buy store (including curbside pick-up for many products at most stores) or an alternative pick-up location. Our ship-from-store capability allows us to offer additional fast and convenient delivery options for customers. Most merchandise is shipped directly from manufacturers to our distribution centers. Distribution is similar for our International segment.
Suppliers and Inventory
Our Domestic and International segments purchase merchandise from a variety of suppliers. In fiscal 2026, our 20 largest suppliers accounted for approximately 80% of the merchandise we purchased, with five suppliers – Apple, Samsung, HP, LG and Sony – representing approximately 55% of total merchandise purchased. We generally do not have long-term written contracts with our vendors that would require them to continue supplying us with merchandise or that secure any of the key terms of our arrangements.
We carefully monitor and manage our inventory levels in an effort to match quantities on hand with consumer demand as closely as possible. Key elements to our inventory management process include the following: continuous monitoring of consumer demand and product life cycles, continuous monitoring and adjustment of inventory receipt levels and pricing, agreements with vendors relating to reimbursement for the cost of markdowns or sales incentives, and agreements with vendors relating to return privileges for certain products.
We also have a global sourcing operation to design, develop, test and contract-manufacture our exclusive brands products.
Store Development
We had 1,068 stores at the end of fiscal 2026 throughout our Domestic and International segments. Our stores are a vital component of our omnichannel strategy, and we believe they are an important competitive advantage. We also have vendor store-within-a-store concepts to allow closer vendor partnerships and a higher quality customer experience. We continuously look for opportunities to optimize our store space, renegotiate leases and selectively open or close locations to support our operations.
Intellectual Property
We own or have the right to use valuable intellectual property such as trademarks, service marks and trade names, including, but not limited to, Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Express, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Jitterbug, Lively, Magnolia, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, Pacific Sales, Rocketfish, TechLiquidators, Yardbird and our Yellow Tag logo.
We have secured domestic and international trademark and service mark registrations for many of our brands. We have also secured patents for many of our inventions. We believe our intellectual property has significant value and is an important factor in the marketing of our company, our stores, our products and our websites.
Seasonality
Our business, like that of many retailers, is seasonal. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season.
Working Capital
We fund our business operations through a combination of available cash and cash equivalents and cash flows generated from operations. In addition, our revolving credit facility is available for additional working capital needs, for general corporate purposes, investments and growth opportunities. Our working capital needs typically increase in the months leading up to the holiday shopping season as we purchase inventory in advance of expected sales.
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Competition
Our competitors are primarily multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers who offer their products and services directly to customers. We believe our ability to help customers online, in our stores and in their homes, and to connect technology product and solutions with customer needs, provide us key competitive advantages. Some of our competitors have lower cost operating structures and seek to compete for sales primarily on price. We carefully monitor pricing offered by other retailers and service providers, as maintaining price competitiveness is one of our ongoing priorities. In addition, we have price-matching policies that allow customers to request that we match a price offered by certain retail stores and online operators. In order to allow this, we are focused on maintaining efficient operations and leveraging the economies of scale available to us through our global vendor partnerships. We believe our dedicated and knowledgeable people; our integrated online, retail and in-home assets; our broad and curated product assortment; our strong vendor partnerships; our service and support offerings designed to solve customer needs; our unique ability to showcase technology in distinct store formats; and our supply chain are important ways in which we maintain our competitive advantage.
Corporate Responsibility & Sustainability ("CR&S")
As we pursue our purpose to enrich lives through technology, we are committed to creating shared long-term value and positively impacting the world, the environment and the communities in which we operate through interactions with our stakeholders, including our customers, employees, vendor partners, community partners and shareholders.
The Nominating, Corporate Governance and Public Policy Committee of our Board of Directors (“Board”) advises and oversees management regarding the effectiveness and risks of our CR&S strategy, programs and initiatives, including environmental goals and progress, corporate responsibility programs, initiatives and public policy positions and advocacy.
Environmental
We aspire to drive forward the circular economy, a system that aims to reduce waste and preserve resources. We focus on our highest-impact areas, including our operations, the energy we procure and the products we sell. These efforts contribute to mitigating climate risks, reducing potential risks to our business and generating long-term cost savings.
In our operations, we strive to reduce the use of natural resources. We believe the following focus areas help to reduce the use of natural resources and our impact on the environment while improving our efficiency and profitability:
•We aim to reduce our carbon emissions by minimizing energy usage, advocating for a cleaner grid and sourcing renewable energy.
•We monitor our water consumption across our business to identify and manage programs that lessen our dependence on water.
•To reduce waste and maximize resource efficiency, we continue to develop a more sustainable supply chain by certifying our supply chain locations under the TRUE zero waste program.
Our focus on sustainable products centers on energy efficiency. By assorting and promoting a broad range of energy-efficient electronics and appliances, we help customers reduce their environmental impact and energy costs throughout the life of the product.
We support the circular economy by keeping consumer products in use for as long as possible through our repair and trade-in services. We put materials back into the manufacturing process when products reach the end of their lives through our electronics and appliance recycling program.
Since launching our nationwide e-waste recycling program in 2008, we have continued to expand our industry leading efforts, and in fiscal 2026, we introduced new financial incentives, continued convenient mail-back options and enhanced home haul-away services to make recycling easier and more rewarding.
Human Rights and Responsible Sourcing
We are committed to respecting human rights through our alignment with the United Nations Guiding Principles on Business and Human Rights.
Further, across the products and services we procure, we seek to mitigate risk and enhance our partnership with suppliers and create value for all stakeholders through our Responsible Sourcing Program. We are active members of the Responsible Business Alliance, as are many of the major brands we sell, which allows us to partner across initiatives and increase our impact. Collectively, we embrace a common Supplier Code of Conduct and audit methodology that creates business value by improving working conditions and environmental practices throughout the supply chain.
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Social Impact
We are committed to helping young people build brighter futures by preparing them to enter quality tech-reliant careers of the future. We are refreshing our community commitments to focus on creating economic opportunity for young people as they chart their path from education to employment. This includes working with a community of like-minded employers moving beyond traditional hiring models, valuing skills over credentials to build a dynamic, resilient workforce. Similarly, our employee volunteer programs, like Geek Squad Academy, spark excitement and interest in technology for young learners while engaging our employees’ unique technical expertise.
Best Buy serves as a fiscal sponsor of the Best Buy Foundation™, whose Best Buy Teen Tech Center® program consists of a network of youth-centered community hubs where young people can connect with the latest technology, learn career skills and engage with supportive mentors in safe environments to ensure young people are prepared for the demands of today's economy.
Human Capital Management
We believe in the power of our people. Our culture is built on the belief that engaged and committed employees – supported by opportunities to learn, grow, innovate and explore – can lead to extraordinary outcomes. At the end of fiscal 2026, we employed approximately 82,000 employees in the U.S. and Canada.
Inclusion and Belonging
We believe in a culture of belonging where everyone feels valued, can thrive and has equal opportunities at all levels in the organization. At the core of this inclusive environment are our company values, which were founded decades ago. One of our values – unleash the power of our people – emphasizes that everyone can learn, grow and be the best version of themselves. We believe that creating this environment is the right thing to do and has been key to our long-term business success.
Our Executive Leadership Team and Compensation and Human Resources Committee of our Board supports the development of a culture of belonging and engagement through oversight of our human resources policies and programs. The Nominating, Corporate Governance and Public Policy Committee of our Board recommends criteria for the selection of individuals to be considered as candidates for election to the Board.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Unless otherwise noted, transactions and other factors significantly impacting our financial condition, results of operations and liquidity are discussed in order of magnitude. Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended February 1, 2025, for discussion of the results of operations for the year ended February 1, 2025, compared to the year ended February 3, 2024, which is incorporated by reference herein.
Overview
We are driven by our purpose to enrich lives through technology and our vision to personalize and humanize technology solutions for every stage of life. We accomplish this by leveraging our combination of tech expertise and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes.
We have two reportable segments: Domestic and International. The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Lively, Jitterbug, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, lively.com, techliquidators.com and yardbird.com. Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Express, Best Buy Marketplace, Best Buy Mobile, Geek Squad, Insignia and TechLiquidators and the domain names bestbuy.ca and techliquidators.ca.
Our fiscal year ends on the Saturday nearest the end of January. Fiscal 2026, fiscal 2025 and fiscal 2024 ended on January 31, 2026, February 1, 2025, and February 3, 2024, respectively. Fiscal 2026 and fiscal 2025 each included 52 weeks. Fiscal 2024 included 53 weeks with the 53rd week occurring in the fiscal fourth quarter. Unless otherwise noted, references to years within the MD&A section of this report relate to fiscal years, not calendar years. Our business, like that of many retailers, is seasonal. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season.
Comparable Sales
Throughout this MD&A, we refer to comparable sales. Comparable sales is a metric used by management to evaluate the performance of our existing stores and digital offerings by measuring the change in net sales for a particular period over the comparable prior period of equivalent length.
Comparable sales includes revenue from stores operating for at least 14 full months; sales initiated on a website, app or virtual store; advertising revenue; commercial sales; credit card revenue; gift card breakage; marketplace commission revenue; and sales of merchandise to wholesalers and dealers. Revenue from acquisitions is included in comparable sales beginning with the first full quarter following the first anniversary of the date of the acquisition. Comparable sales excludes revenue from stores closed more than 14 days (including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters) until at least 14 full months after reopening; the impact of certain periodic warranty-related profit-share revenue; the effect of fluctuations in foreign currency exchange rates (applicable to our International segment only); and the impact of the 53rd week (applicable in 53-week fiscal years only). Comparable sales is based on our fiscal calendar and is not adjusted to align calendar weeks. All periods presented apply this methodology consistently.
Comparable online sales is a subset of comparable sales related to our digital offerings and includes sales initiated on a website, app or virtual store; advertising revenue and marketplace commission revenue.
We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores and digital offerings versus the portion resulting from opening new stores or closing existing stores. The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as other retailers’ methods.
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Non-GAAP Financial Measures
This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), as well as certain non-GAAP financial measures, such as consolidated adjusted selling, general and administrative expenses (“SG&A”), consolidated adjusted SG&A rate, consolidated adjusted operating income, consolidated adjusted operating income rate, consolidated adjusted effective tax rate and consolidated adjusted diluted earnings per share (“EPS”). We believe that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, provide additional useful information for evaluating current period performance and assessing future performance. For these reasons, internal management reporting, including budgets, forecasts and financial targets used for short-term incentives are based on non-GAAP financial measures. Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill and acquired intangible asset impairments, certain long-lived asset impairments, price-fixing settlements, gains and losses on disposals of subsidiaries and certain investments, amortization of definite-lived intangible assets associated with acquisitions, certain acquisition-related costs and the tax effect of all such items. In addition, certain other items may be excluded from non-GAAP financial measures when we believe doing so provides greater clarity to management and our investors. We provide reconciliations of the most comparable financial measures presented in accordance with GAAP to presented non-GAAP financial measures that enable investors to understand the adjustments made in arriving at the non-GAAP financial measures and to evaluate performance using the same metrics as management. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Non-GAAP financial measures may be calculated differently from similarly titled measures used by other companies, thereby limiting their usefulness for comparative purposes.
In our discussions of the operating results of our consolidated business and our International segment, we sometimes refer to the impact of changes in foreign currency exchange rates or the impact of foreign currency exchange rate fluctuations, which are references to the differences between the foreign currency exchange rates we use to convert the International segment’s operating results from local currencies into U.S. dollars for reporting purposes. We also may use the term “constant currency,” which represents results adjusted to exclude foreign currency impacts. We calculate those impacts as the difference between the current period results translated using the current period currency exchange rates and using the comparable prior period currency exchange rates. We believe the disclosure of revenue changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates.
Refer to the Non-GAAP Financial Measures section below for detailed reconciliations of items impacting consolidated adjusted SG&A, consolidated adjusted operating income, consolidated adjusted effective tax rate and consolidated adjusted diluted EPS in the presented periods.
Business Strategy Update
Our multi-year strategy remains consistent, which is to strengthen our position in retail as a leading omnichannel destination for technology, while at the same time scaling new profit streams. Our fiscal 2027 priorities and resource allocation philosophy also remain consistent as we build upon the momentum from fiscal 2026. Those priorities are:
Drive omni-channel experiences that resonate with customers
Starting with our digital experiences, we have already activated on ways to bring our products to life through artificial intelligence (“AI”) platforms, which will continue to grow during fiscal 2027. We are also partnering with various platform providers to create a more seamless agentic shopping journey, making it easier for customers to both find and purchase directly from our product catalog. Other fiscal 2027 digital priorities include strengthening customer recognition and personalization, increasing customer adoption and engagement with the Best Buy App and driving digital conversion for categories like major appliances and home theater.
In our physical stores, we are continuing to improve the customer experience while also using our space more effectively – often in partnership with our vendors. From a store labor perspective, we will focus on enhancements and optimization, building on the significant operating model changes we have made in recent years that were designed to provide the experience our customers expect in the most efficient way possible.
Scaling Best Buy Ads and Best Buy Marketplace
In recent years, our retail media network, Best Buy Ads, has primarily served our merchandise vendors. In fiscal 2027, we anticipate continuing to grow Best Buy Ads through existing advertisers as well as other areas of opportunity, including advertising agencies and demand-side platforms. In order to support this growth, we are investing in our technology capabilities, marketing and headcount across our sales, operations and technology teams.
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During fiscal 2026, we launched Best Buy Marketplace within our Domestic segment, which we believe will complement our existing product assortment with access to a broader range of products offered by marketplace sellers. We believe this will unlock potential new commission and advertising revenue, without requiring inventory investment. In fiscal 2027, we plan to continue to expand our third-party seller count, while investing in technology, advertising and our marketplace team to support future growth.
Drive efficiencies and identify cost reductions that are crucial to helping to fund investment capacity and offset pressure in our business
In fiscal 2027, we will continue to prioritize our longstanding commitment to operational efficiency by identifying cost reductions and other savings to help fund investment capacity for new and existing initiatives and offset financial pressures facing our business.
Tariffs
During fiscal 2026, U.S. tariffs were imposed under the International Emergency Economic Powers Act (the “IEEPA”) that applied to certain imported private‑label branded and direct import products that we sold during the year or held in inventory as of the end of the fiscal year. While we directly import approximately 1% to 3% of our overall assortment, our supply chain is highly dependent on vendor imports, including product sourced from China, Mexico and Southeast Asia.
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA were unauthorized. The ruling did not address potential refunds. Following the ruling, various actions and proceedings have occurred involving U.S. trade authorities and the U.S. Court of International Trade relating to the administration, collection and potential refund of tariffs imposed under the IEEPA. The outcome of these actions, including the timing, process and ultimate recoverability of any refunds, remains uncertain.
In addition, subsequent to the U.S. Supreme Court’s ruling, the U.S. government has initiated further actions under existing trade authorities to evaluate foreign trade practices, which could result in the imposition of additional tariffs or other trade measures. We will continue to evaluate the potential effects of these developments on our financial position, results of operations and cash flows. For additional information regarding tariff‑related risks, see Item 1A, Risk Factors, in this Annual Report on Form 10‑K.
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Results of Operations
Consolidated Results
In fiscal 2026, our comparable sales returned to growth and we stabilized our market share position while navigating a complex and often evolving tariff situation. We launched and began to scale Best Buy Marketplace within our Domestic segment and grew our retail media network, Best Buy Ads. We believe we were able to both make investments in our strategic initiatives and expand our operating margin through a combination of disciplined expense management and efficiency optimization efforts.
Selected consolidated financial data was as follows ($ in millions, except per share amounts):
| 2026 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 41,691 | $ | 41,528 | $ | 43,452 | |||||||||
| Revenue % change | 0.4 | % | (4.4) | % | (6.1) | % | |||||||||
| Comparable sales % change | 0.5 | % | (2.3) | % | (6.8) | % | |||||||||
| Gross profit | $ | 9,373 | $ | 9,385 | $ | 9,603 | |||||||||
Gross profit as a % of revenue(1) | 22.5 | % | 22.6 | % | 22.1 | % | |||||||||
| SG&A | $ | 7,623 | $ | 7,651 | $ | 7,876 | |||||||||
SG&A as a % of revenue(1) | 18.3 | % | 18.4 | % | 18.1 | % | |||||||||
| Restructuring charges | $ | 190 | $ | (3) | $ | 153 | |||||||||
| Goodwill and intangible asset impairments | $ | 171 | $ | 475 | $ | - | |||||||||
| Operating income | $ | 1,389 | $ | 1,262 | $ | 1,574 | |||||||||
| Operating income as a % of revenue | 3.3 | % | 3.0 | % | 3.6 | % | |||||||||
| Net earnings | $ | 1,069 | $ | 927 | $ | 1,241 | |||||||||
| Diluted EPS | $ | 5.04 | $ | 4.28 | $ | 5.68 | |||||||||
(1)Because retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers' corresponding rates. For additional information regarding costs classified in cost of sales and SG&A, refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
In fiscal 2026, we generated $41.7 billion in revenue, compared to $41.5 billion in fiscal 2025, and our comparable sales grew 0.5%, primarily driven by comparable sales growth in computing and mobile phones, partially offset by comparable sales declines in home theater and appliances. The comparable sales growth was due to a mix of new technology innovation, our continued focus on omni-channel customer experience and strong vendor partnerships.
Restructuring charges in fiscal 2026 were primarily related to a labor and store optimization restructuring initiative that commenced in the second quarter of fiscal 2026 and a restructuring initiative focused on optimizing our Best Buy Health business that commenced in the first quarter of fiscal 2026. Refer to Note 2, Restructuring, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.
Goodwill and intangible asset impairments in fiscal 2026 were related to Best Buy Health. A change in Best Buy Health’s customer base during the third quarter of fiscal 2026 resulted in an impairment review of all Best Buy Health assets. The impairments reflect downward revisions of our revenue growth rates and margin rates compared to previous projections, in part due to pressures in the Medicaid and Medicare Advantage markets. Refer to Note 3, Goodwill and Intangible Assets, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.
Operating income rate increased in fiscal 2026, primarily due to lower goodwill and intangible asset impairments, partially offset by higher restructuring charges.
Diluted EPS increased in fiscal 2026, primarily due to higher net earnings driven by lower goodwill and intangible asset impairments, partially offset by higher restructuring charges.
In fiscal 2026, revenue changes were primarily driven by our International segment, and operating income rate changes were primarily driven by our Domestic segment. Gross profit rate and SG&A rate changes in fiscal 2026 were driven by both of our segments. For further discussion of our Domestic and International segments, see Segment Performance Summary, below.
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Store Summary
Stores open by segment were as follows:
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||
| Best Buy | 886 | 891 | 901 | ||||||||||||
| Outlet Centers | 18 | 25 | 22 | ||||||||||||
| Pacific Sales | 20 | 20 | 20 | ||||||||||||
| Yardbird | 2 | 21 | 22 | ||||||||||||
| Total Domestic stores | 926 | 957 | 965 | ||||||||||||
| Canada Best Buy stores | 130 | 129 | 128 | ||||||||||||
| Canada Best Buy Mobile stand-alone stores | 12 | 31 | 32 | ||||||||||||
Total International stores(1) | 142 | 160 | 160 | ||||||||||||
| Total stores | 1,068 | 1,117 | 1,125 | ||||||||||||
(1)Excludes Best Buy Express stores leased by Bell Canada.
We continuously monitor store performance as part of a market-driven, omnichannel strategy. As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open. We currently expect to increase our Domestic segment Best Buy store count by approximately 4 stores by the end of fiscal 2027.
In fiscal 2026, we closed select non-traditional Domestic and International store locations in conjunction with our restructuring initiative that commenced in the second quarter of fiscal 2026, with additional closures expected in fiscal 2027. See Note 2, Restructuring, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for additional information.
Income Tax Expense
Income tax expense decreased to $337 million in fiscal 2026 compared to $372 million in fiscal 2025. Our effective tax rate decreased to 24.0% in fiscal 2026 compared to 28.7% in fiscal 2025. The decreases were primarily due to the tax impacts of the restructuring charges and the associated exit of a component of our Best Buy Health business, as well as certain expenses that were not deductible in the prior year. The decrease in income tax expense was partially offset by the impact of increased pre-tax earnings. See Note 2, Restructuring, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for additional information.
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Segment Performance Summary
Domestic Segment
Selected financial data for the Domestic segment was as follows ($ in millions):
| 2026 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 38,278 | $ | 38,238 | $ | 40,097 | |||||||||
| Revenue % change | 0.1 | % | (4.6) | % | (6.3) | % | |||||||||
Comparable sales % change(1) | 0.4 | % | (2.5) | % | (7.1) | % | |||||||||
| Gross profit | $ | 8,636 | $ | 8,647 | $ | 8,850 | |||||||||
| Gross profit as a % of revenue | 22.6 | % | 22.6 | % | 22.1 | % | |||||||||
Adjusted SG&A(2) | $ | 6,966 | $ | 7,000 | $ | 7,175 | |||||||||
Adjusted SG&A as a % of revenue(3) | 18.2 | % | 18.3 | % | 17.9 | % | |||||||||
Adjusted operating income(2) | $ | 1,670 | $ | 1,647 | $ | 1,675 | |||||||||
Adjusted operating income as a % of revenue(4) | 4.4 | % | 4.3 | % | 4.2 | % | |||||||||
| Selected Online Revenue Data | |||||||||||||||
| Total online revenue | $ | 13,166 | $ | 12,994 | $ | 13,102 | |||||||||
| Online revenue as a % of total segment revenue | 34.4 | % | 34.0 | % | 32.7 | % | |||||||||
Comparable online sales % change(1) | 1.3 | % | (0.8) | % | (7.8) | % | |||||||||
(1)Comparable online sales are included in the comparable sales calculation.
(2)Represents segment Adjusted SG&A and segment Adjusted operating income as reported in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting.
(3)Adjusted SG&A as a % of revenue is calculated as Domestic segment Adjusted SG&A divided by Domestic segment Revenue.
(4)Adjusted operating income as a % of revenue is calculated as Domestic segment Adjusted operating income divided by Domestic segment Revenue.
Domestic segment revenue increased slightly in fiscal 2026, primarily driven by comparable sales growth in computing, gaming and mobile phones, mostly offset by comparable sales declines in home theater and appliances. Online revenue of $13.2 billion increased 1.3% on a comparable basis in fiscal 2026.
Domestic segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:
| Revenue Mix | Comparable Sales | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| 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 | % | ||||||||||||||
| Other | 1 | % | 1 | % | (6.3) | % | 15.9 | % | ||||||||||||||
| Total | 100 | % | 100 | % | 0.4 | % | (2.5) | % | ||||||||||||||
Notable comparable sales changes by revenue category were as follows:
•Computing and Mobile Phones: The 5.7% comparable sales growth was driven primarily by laptops, mobile phones and desktops.
•Consumer Electronics: The 5.4% comparable sales decline was driven primarily by home theater.
•Appliances: The 8.9% comparable sales decline was driven primarily by large appliances.
•Entertainment: The 6.8% comparable sales growth was driven primarily by gaming, partially offset by a comparable sales decline in drones.
•Services: The 1.0% comparable sales growth was driven primarily by Best Buy Marketplace and Best Buy Ads, partially offset by a comparable sales decline in our Best Buy Health service offerings.
Domestic segment gross profit rate remained effectively unchanged in fiscal 2026, primarily due to lower product margin rates, mostly offset by rate improvement within the services category and growth in Best Buy Ads.
Domestic segment adjusted SG&A decreased slightly in fiscal 2026, primarily due to lower Best Buy Health expenses, lower depreciation and favorable fiscal 2026 indirect tax resolutions, mostly offset by increased expenses in support of our Best Buy Ads and Best Buy Marketplace initiatives, including higher advertising and employee compensation expenses.
32
Domestic segment adjusted operating income rate increased slightly in fiscal 2026, primarily due to a favorable adjusted SG&A rate.
International Segment
Selected financial data for the International segment was as follows ($ in millions):
| 2026 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 3,413 | $ | 3,290 | $ | 3,355 | |||||||||
| Revenue % change | 3.7 | % | (1.9) | % | (4.3) | % | |||||||||
| Comparable sales % change | 2.3 | % | (0.5) | % | (3.2) | % | |||||||||
| Gross profit | $ | 737 | $ | 738 | $ | 753 | |||||||||
| Gross profit as a % of revenue | 21.6 | % | 22.4 | % | 22.4 | % | |||||||||
Adjusted SG&A(1) | $ | 622 | $ | 630 | $ | 640 | |||||||||
Adjusted SG&A as a % of revenue(2) | 18.2 | % | 19.1 | % | 19.1 | % | |||||||||
Adjusted operating income(1) | $ | 115 | $ | 108 | $ | 113 | |||||||||
Adjusted operating income as a % of revenue(3) | 3.4 | % | 3.3 | % | 3.4 | % | |||||||||
(1)Represents segment Adjusted SG&A and segment Adjusted operating income in accordance with ASC 280, Segment Reporting.
(2)Adjusted SG&A as a % of revenue is calculated as International segment Adjusted SG&A divided by International segment Revenue.
(3)Adjusted operating income as a % of revenue is calculated as International segment Adjusted operating income divided by International segment Revenue.
International segment revenue increased in fiscal 2026, primarily driven by revenue from Best Buy Express locations excluded from comparable sales and comparable sales growth primarily driven by computing and mobile phones, partially offset by the negative impact of foreign exchange rates.
International segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:
| Revenue Mix | Comparable Sales | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Computing and Mobile Phones | 49 | % | 48 | % | 5.5 | % | 3.4 | % | ||||||||||||||
| Consumer Electronics | 27 | % | 28 | % | (0.1) | % | (3.3) | % | ||||||||||||||
| Appliances | 9 | % | 10 | % | (5.1) | % | (0.9) | % | ||||||||||||||
| Entertainment | 8 | % | 8 | % | (0.6) | % | (13.3) | % | ||||||||||||||
| Services | 6 | % | 5 | % | 5.2 | % | 5.3 | % | ||||||||||||||
| Other | 1 | % | 1 | % | (6.3) | % | (11.0) | % | ||||||||||||||
| Total | 100 | % | 100 | % | 2.3 | % | 0.5 | % | ||||||||||||||
Notable comparable sales changes by revenue category were as follows:
•Computing and Mobile Phones: The 5.5% comparable sales growth was driven primarily by computing and mobile phones.
•Consumer Electronics: The 0.1% comparable sales decline was driven primarily by home theater and smart home, partially offset by comparable sales growth in digital imaging and health and fitness.
•Appliances: The 5.1% comparable sales decline was driven by small and large appliances.
•Entertainment: The 0.6% comparable sales decline was driven primarily by virtual reality and drones, partially offset by comparable sales growth in gaming.
•Services: The 5.2% comparable sales growth was driven primarily by growth in marketplace and our membership programs.
International segment gross profit rate decreased in fiscal 2026, primarily due to lower product margin rates and unfavorable supply chain costs, partially offset by marketplace growth.
International segment adjusted SG&A decreased in fiscal 2026, primarily due to lower employee compensation expense, including incentive compensation, and the favorable impact of foreign exchange rates.
International segment adjusted operating income rate increased in fiscal 2026, primarily due to increased leverage from higher sales volumes, which resulted in a favorable adjusted SG&A rate, partially offset by an unfavorable gross profit rate.
33
Non-GAAP Financial Measures
Reconciliations of consolidated SG&A, consolidated operating income, consolidated effective tax rate and consolidated diluted EPS (GAAP financial measures) to consolidated adjusted SG&A, consolidated adjusted operating income, consolidated adjusted effective tax rate and consolidated adjusted diluted EPS (non-GAAP financial measures), respectively, were as follows ($ in millions, except per share amounts):
| 2026 | 2025 | 2024 | |||||||||||||
| SG&A | $ | 7,623 | $ | 7,651 | $ | 7,876 | |||||||||
| % of revenue | 18.3 | % | 18.4 | % | 18.1 | % | |||||||||
Intangible asset amortization(1) | (14) | (21) | (61) | ||||||||||||
Long-lived asset impairment(2) | (21) | - | - | ||||||||||||
| Adjusted SG&A | $ | 7,588 | $ | 7,630 | $ | 7,815 | |||||||||
| % of revenue | 18.2 | % | 18.4 | % | 18.0 | % | |||||||||
| Operating income | $ | 1,389 | $ | 1,262 | $ | 1,574 | |||||||||
| % of revenue | 3.3 | % | 3.0 | % | 3.6 | % | |||||||||
Intangible asset amortization(1) | 14 | 21 | 61 | ||||||||||||
Long-lived asset impairment(2) | 21 | - | - | ||||||||||||
Restructuring charges(3) | 190 | (3) | 153 | ||||||||||||
Goodwill and intangible asset impairments(2) | 171 | 475 | - | ||||||||||||
| Adjusted operating income | $ | 1,785 | $ | 1,755 | $ | 1,788 | |||||||||
| % of revenue | 4.3 | % | 4.2 | % | 4.1 | % | |||||||||
| Effective tax rate | 24.0 | % | 28.7 | % | |||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-03-23 | Barry Corie S | CEO | Sell | -42,869 | $64.02 | -$2,744,431 |
| 2026-03-23 | Bilunas Matthew M | SEVP Enterprise Strategy & CFO | Sell | -11,356 | $64.02 | -$727,000 |
| 2026-03-23 | Scarlett Kathleen | SEVP, Corp Affairs & HR | Sell | -8,049 | $64.02 | -$515,289 |
| 2026-03-23 | Bonfig Jason J | SEVP Cust Offer, Fulfill & Can | Sell | -6,336 | $64.02 | -$405,624 |
| 2026-03-23 | Watson Mathew | SVP, Controller & CAO | Sell | -3,298 | $64.02 | -$211,135 |
| 2026-03-23 | Hartman Todd G. | GC, Chief Risk Officer | Sell | -5,339 | $64.02 | -$341,797 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-06-05 10-Q expected by 2026-06-11 (in 20 days)
- ~2026-09-04 10-Q expected by 2026-09-10 (in 111 days)
- ~2026-12-04 10-Q expected by 2026-12-10 (in 202 days)
- ~2027-03-17 10-K expected by 2027-03-29 (in 305 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-30 DEF 14A Proxy Statement
- 2026-04-22 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-03-18 10-K Annual Report
- 2026-03-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-10 8-K/A Officer/Director Change
- 2025-12-05 10-Q Quarterly Report
- 2025-12-01 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-25 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-12 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-09-05 10-Q Quarterly Report
- 2025-08-28 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-11 8-K Officer/Director Change
- 2025-06-06 10-Q Quarterly Report
- 2025-05-29 8-K Earnings Release; Financial Statements and Exhibits
- 2025-04-23 8-K Material Agreement Entered; Material Agreement Terminated; Material Financial Obligation; Financial Statements and Exhibits