0000764478-26-000022
SEC filingRevenue grew 1.9% YoY driven by gaming and computing, while operating margin expanded on lower restructuring charges.
In Q1 FY27 (three months ended May 2, 2026), Best Buy reported revenue of $8.936B, up 1.9% from $8.767B in the prior-year period. Comparable sales increased 2.0%, reversing a 0.7% decline last year. Growth was driven by strength in gaming, computing, and mobile phones, partially offset by a decline in major appliances. Gross profit margin improved slightly to 23.5% from 23.4%, benefiting from growth in higher-margin services and marketplace initiatives. Operating income surged to $370M (4.1% of revenue) from $219M (2.5%), largely due to a swing in restructuring charges: a $9M recovery this year vs. a $109M charge last year. Net earnings rose to $276M from $202M, and diluted EPS increased to $1.31 from $0.95. On an adjusted basis (excluding intangible amortization and restructuring), adjusted diluted EPS was $1.28 vs. $1.15.
The Domestic segment generated $8.249B in revenue (+1.5% YoY) with comparable sales up 1.8%. Online revenue was $2.616B (31.7% of segment), with comparable online sales up 1.4%. By category, entertainment led with a 38.1% comparable sales surge (driven by gaming), followed by services (+5.5%) and computing/mobile phones (+4.2%). Consumer electronics fell 2.7% and appliances dropped 13.6%. Adjusted operating income margin improved to 4.3% from 4.0%, driven by gross margin expansion from marketplace and advertising.
The International segment (Canada) posted revenue of $687M (+7.3%), boosted by a 4.7% comparable sales increase and favorable foreign exchange. Computing/mobile phones (+6.4%) and entertainment (+19.2%) led category gains, while appliances (-8.3%) lagged. Adjusted operating margin inched up to 0.7% from 0.6%, as higher sales leverage offset lower product margins.
Management did not provide quantitative guidance for Q2 or full-year FY27 beyond noting an expected increase of four additional Domestic Best Buy stores by fiscal year-end. The MD&A emphasized ongoing tariff uncertainty and the lack of recognized refunds related to IEEPA tariffs. No material changes in accounting policies or contractual obligations were reported. The company maintains a $1.25B undrawn revolving credit facility and continues to prioritize investments in growth initiatives such as Best Buy Marketplace and Best Buy Ads while returning cash to shareholders through dividends.