01—Abstract
Summary
Summary of the 10-Q filed December 5, 2025. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. reported third-quarter fiscal 2026 revenue of $9.67 billiona, up from $9.45 billion a year earlier, with comparable sales growing 2.7%.
Gross profit was $2.25 billionb, roughly flat year over year, but operating income fell to $198 million from $350 million, driven primarily by a $171 million goodwill and intangible asset impairment tied to Best Buy Health. Net earnings were $140 million, or $0.66 diluted EPS, versus $273 million and $1.26 a year earlier. The filing states that a large proportion of revenue and earnings is generated in the fiscal fourth quarter, so interim results are not necessarily indicative of the full year.
For the first nine months of fiscal 2026, revenue was $27.88 billionc and comparable sales rose 1.2%, while operating income fell to $668 million from $1.05 billion. Restructuring charges of $218 million, primarily from a labor and store optimization initiative and the Best Buy Health and China sourcing initiative, and the impairments weighed on results. Diluted EPS was $2.48 versus $3.73.
The company reported adjusted diluted EPS of $3.82d for the nine months, a non-GAAP measure reconciled in the MD&A. Balance sheet and cash flow show inventories of $7.99 billion, up from $5.09 billion at fiscal year-end, with accounts payable rising to $7.32 billion, and cash and cash equivalents of $923 million. Operating cash flow was $684 million for the nine months, against $529 million of capital expenditures.
The company repurchased $200 million of common stock and paid $602 million in dividends. Remaining authorization under the $5.0 billion repurchase program was $3.1 billion as of November 1, 2025.
02—Key points
Key Highlights
- Q3 revenue of $9.67 billion rose from $9.45 billion; comparable sales increased 2.7%, led by computing, gaming and mobile phones.
- Q3 operating income fell to $198 million from $350 million, primarily due to a $171 million goodwill and intangible asset impairment related to Best Buy Health.
- Q3 diluted EPS was $0.66 versus $1.26 a year earlier; adjusted diluted EPS was $1.40 versus $1.26 a year earlier.
- Nine-month restructuring charges totaled $218 million across labor and store optimization and Best Buy Health initiatives, versus $4 million in the prior-year period.
- Merchandise inventories were $7.99 billion at November 1, 2025, up from $5.09 billion at February 1, 2025, with accounts payable rising to $7.32 billion.
- Supply chain financing liability included in accounts payable was $1.09 billion, up from $398 million at fiscal year-end.
- The company repurchased $200 million of stock and paid $602 million in dividends in the first nine months; $3.1 billion remained under the $5.0 billion repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Best Buy kept $0.01.
- Revenue$9.67B100.0%
- Cost of revenue−$7.42B76.8%
- Gross profit$2.25B23.2%
- Operating costs−$2.05B21.2%
- Operating income$198.0M2.0%
- Interest, other & tax−$58.0M0.6%
- Net income$140.0M1.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed December 5, 2025Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $9.67B$9.45B | +2.4% |
| Cost of Revenue | $7.42B$7.23B | +2.7% |
| Gross Profit | $2.25B$2.22B | +1.4% |
| SG&A Expenses | $1.88B$1.87B | +0.7% |
| Operating Income | $198.00M$350.00M | −43.4% |
| Net Income | $140.00M$273.00M | −48.7% |
| EPS (Basic) | $0.67$1.27 | −47.2% |
| EPS (Diluted) | $0.66$1.26 | −47.6% |
| Shares Outstanding (Basic) | 210.70M214.80M | −1.9% |
| Shares Outstanding (Diluted) | 212.10M216.70M | −2.1% |
05—Questions
Frequently Asked Questions
Why did operating income decline so sharply in the third quarter?
The filing attributes the decline primarily to goodwill and intangible asset impairments of $171 million, all related to Best Buy Health. The impairments reflect downward revisions to revenue growth and margin rates, in part due to pressures in the Medicaid and Medicare Advantage markets. Operating income rate fell to 2.0% from 3.7%.
What is driving revenue growth?
Domestic revenue rose 2.1% in the quarter, driven by comparable sales growth in computing and mobile phones (7.6%) and entertainment (14.0%, primarily gaming). Declines in appliances (8.4%) and consumer electronics (2.9%, mainly home theater) partially offset these gains. International revenue increased 6.1%, with comparable sales up 6.3%.
What restructuring actions has Best Buy taken this year?
The company commenced a labor and store optimization initiative in the second quarter, aimed at aligning field resources with changing customer behaviors and closing select non-traditional stores, with $121 million of charges through nine months. It also began a Best Buy Health optimization and China sourcing initiative in the first quarter, with $102 million of charges through nine months. The company does not expect material future charges for either initiative, though additional store closures are expected in fiscal 2027.
How is the company's cash position and shareholder return?
Cash and cash equivalents were $923 million at November 1, 2025, down from $1.58 billion at fiscal year-end. Operating cash flow was $684 million for the first nine months. The company paid $602 million in dividends, with a regular quarterly dividend of $0.95 per share, and repurchased $200 million of stock. The filing notes $1.25 billion of undrawn capacity on its revolving credit facility.
06—Continue