BBY · Best Buy Co., Inc.

Best Buy's Q1 FY27 results beat expectations, with enterprise comparable sales up 2.0% versus a guided outlook that anticipated a decline. Revenue of $8.94B grew 1.9% YoY, driven by strength in gaming, computing, mobile phones, and services, partially offset by appliance weakness. The domestic segment posted 1.8% comp growth, while international surged 4.7%, benefiting from favorable FX. Gross margin expanded 10 bps to 23.5%, with domestic gross profit rate up 20 bps to 23.7% due to growth in higher-margin Marketplace and Best Buy Ads, though product margins were lower. Adjusted operating income rate improved 30 bps to 4.1%, reflecting better cost control and leverage. GAAP diluted EPS of $1.31 rose 38% (adjusted EPS up 11% to $1.28), aided by lower restructuring charges. Management reiterated full-year FY27 guidance, including adjusted EPS of $6.30-$6.60, signaling confidence despite a cautious comp outlook of -1% to +1%. For Q2, they guided comp sales of ~1% growth and adjusted operating margin of ~3.9%, flat YoY, as they lap a large gaming launch. Capital returns included a $0.96 quarterly dividend and expected $300M in buybacks. Commentary from CEO Corie Barry highlighted better-than-expected performance and a leadership transition, while CFO Matt Bilunas noted strong May trends. Overall, the quarter underscores Best Buy's ability to navigate a promotional environment while scaling new profit streams.