01—Abstract
Summary
Summary of the 10-Q filed September 5, 2025. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. reported second-quarter fiscal 2026 revenue of $9.4 billiona, up from $9.3 billion a year earlier, with comparable sales growth of 1.6%.
Growth came from Domestic comparable sales of 1.1% and International comparable sales of 7.6%, led by gaming, computing and mobile phones. Profitability declined. Restructuring charges of $114 millionb, versus a $7 million benefit a year earlier, cut operating income to $251 million from $383 million, and operating margin fell to 2.7% from 4.1%.
Net earnings were $186 millionc, and diluted EPS was $0.87 versus $1.34. Excluding restructuring and other non-GAAP items, adjusted diluted EPS was $1.28 versus $1.34. For the first six months, revenue was $18.2 billion and comparable sales rose 0.4%, but diluted EPS fell to $1.82 from $2.47 and adjusted diluted EPS to $2.43 from $2.54.
The company recorded $122 milliond of restructuring charges under a Fiscal 2026 Labor and Store Optimization Initiative that began in the second quarter, and $105 million under a Best Buy Health Optimization and China Sourcing Initiative. Operating cash flow was $783 million versus $817 million, and cash and cash equivalents were $1,456 million at August 2, 2025. The company repurchased $167 million of stock in the six months and paid $403 million in dividends, with $3.1 billion remaining under its $5.0 billion repurchase authorization.
The filing states that vendor imports from China now make up roughly 30% to 35% of products purchased, compared with 55% in the prior Form 10-K, and that the company is working with vendors to mitigate tariff effects. The filing does not include forward-looking financial guidance.
02—Key points
Key Highlights
- Second-quarter revenue of $9,438 million rose 1.6% from $9,288 million, with comparable sales up 1.6%.
- Operating income fell to $251 million from $383 million, mainly due to restructuring charges of $114 million; operating income rate declined to 2.7% from 4.1%.
- Diluted EPS was $0.87 versus $1.34 a year earlier; adjusted diluted EPS was $1.28 versus $1.34.
- Domestic comparable sales rose 1.1% in the quarter, with Entertainment up 37.5% (driven by gaming), while Appliances fell 8.5%. International comparable sales rose 7.6%.
- Six-month operating cash flow was $783 million versus $817 million, and cash and cash equivalents were $1,456 million at August 2, 2025.
- Capital returns continued: $167 million of share repurchases and $403 million of dividends in the first six months, with $3,118 million remaining under the $5.0 billion authorization.
- Vendor imports from China are estimated at 30% to 35% of purchases, down from 55% in the prior Form 10-K, as vendors shifted production across countries.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Best Buy kept $0.02.
- Revenue$9.44B100.0%
- Cost of revenue−$7.24B76.8%
- Gross profit$2.19B23.2%
- Operating costs−$1.94B20.6%
- Operating income$251.0M2.7%
- Interest, other & tax−$65.0M0.7%
- Net income$186.0M2.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed September 5, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $9.44B$9.29B | +1.6% |
| Cost of Revenue | $7.24B$7.10B | +2.0% |
| Gross Profit | $2.19B$2.19B | +0.4% |
| SG&A Expenses | $1.83B$1.81B | +1.0% |
| Operating Income | $251.00M$383.00M | −34.5% |
| Net Income | $186.00M$291.00M | −36.1% |
| EPS (Basic) | $0.88$1.35 | −34.8% |
| EPS (Diluted) | $0.87$1.34 | −35.1% |
| Shares Outstanding (Basic) | 211.50M216.00M | −2.1% |
| Shares Outstanding (Diluted) | 212.00M217.10M | −2.3% |
05—Questions
Frequently Asked Questions
Why did profitability decline despite revenue growth?
The filing attributes the decline in operating income rate and diluted EPS primarily to higher restructuring charges, which were $114 million in the quarter compared with a $7 million benefit a year earlier. Gross profit rate also fell to 23.2% from 23.5%, driven by lower product margin rates and a higher mix of lower-margin categories in the Domestic segment.
What restructuring actions did the company take?
In the second quarter, the company began a Fiscal 2026 Labor and Store Optimization Initiative to align field resources with changing customer behaviors, close select non-traditional stores and redirect corporate resources, with $122 million of charges. Earlier, in the first quarter, it began an initiative to optimize Best Buy Health, which included exiting a component of that business, with $105 million of charges in the first six months. The company does not expect material future restructuring charges under either initiative.
How is the company managing tariff exposure?
The filing says the company directly imports about 2% to 3% of its assortment, while vendor imports from China are estimated at 30% to 35% of products purchased, down from 55% in the prior Form 10-K. It states that approximately 25% of products come from the U.S. and Mexico. The company says it works with vendors to mitigate tariff impacts on the business and customers, and it notes significant uncertainty about the scope, timing and magnitude of tariffs.
How strong is the balance sheet and liquidity position?
At August 2, 2025, cash and cash equivalents were $1,456 million and long-term debt was $1,164 million, excluding the current portion. The company has $500 million of 4.45% notes due 2028 and $650 million of 1.95% notes due 2030. It has a $1.25 billion undrawn revolving credit facility expiring April 2030. Supply chain financing liabilities within accounts payable rose to $872 million from $398 million at fiscal year-end 2024.
What is the outlook for capital returns?
The company paid a regular quarterly dividend of $0.95 per share, up from $0.94 a year earlier, and repurchased $167 million of stock in the first six months. It has $3.1 billion remaining under its $5.0 billion authorization, which has no expiration date. The filing states that share repurchase plans are evaluated on an ongoing basis and that the timing and amount of future repurchases may vary.
06—Continue