01—Abstract
Summary
Summary of the 10-Q filed September 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. reported second-quarter fiscal 2027 revenue of $9.78 billiona, up from $9.44 billion a year earlier, with comparable sales growing 4.1% for the quarter and 3.1% for the first six months.
Operating income rose to $421 millionb from $251 million, and net earnings increased to $315 million from $186 million. Diluted EPS was $1.48 versus $0.87 in the prior-year quarter. Growth was driven primarily by computing, home theater, AI glasses and trading cards, partially offset by a decline in traditional gaming.
Gross profit rate improved to 23.9% of revenue, aided by Best Buy Marketplace and Best Buy Ads growth and $34 millionc of IEEPA tariff refunds. Restructuring charges were a net reduction of $6 million in the quarter, compared with a $114 million charge a year earlier. The balance sheet strengthened over the period.
Cash and cash equivalents rose to $2.26 billiond from $1.74 billion at fiscal year-end, and total equity increased to $3.18 billion. Merchandise inventories grew to $6.30 billion and accounts payable to $6.03 billion. Supply chain financing liabilities within accounts payable were $986 million, up from $600 million at January 31, 2026.
Six-month operating cash flow was $1.30 billion, compared with $783 million a year earlier, while share repurchases fell to $36 million from $165 million and dividends paid were $405 million. An additional $41 million of tariff refunds was received on September 2, 2026, and will be recorded in the third quarter.
Domestic segment revenue rose 4.3% in the quarter with adjusted operating income of $404 million, while the International segment revenue declined 4.2% with adjusted operating income of $13 million. The company's $1.25 billion revolving credit facility remained undrawn, and the $2.97 billion of remaining repurchase authorization is unchanged in its expiration terms.
02—Key points
Key Highlights
- Q2 fiscal 2027 revenue of $9.78 billion, up from $9.44 billion; comparable sales increased 4.1%.
- Operating income of $421 million versus $251 million, with operating margin of 4.3% of revenue compared with 2.7% a year earlier.
- Net earnings of $315 million and diluted EPS of $1.48, compared with $186 million and $0.87 in the prior-year quarter.
- Restructuring charges were a net $6 million reduction in the quarter, versus a $114 million charge in Q2 fiscal 2026.
- Operating cash flow for the first six months was $1.30 billion, up from $783 million, driven mainly by inventory and accounts payable timing.
- Cash and cash equivalents rose to $2.26 billion; the $1.25 billion revolving credit facility remained undrawn.
- Additional tariff refunds of $41 million were received on September 2, 2026, following $34 million refunded in the second quarter.
03—Questions
Frequently Asked Questions
What drove the improvement in operating income this quarter?
Operating income increased to $421 million from $251 million, primarily due to lower restructuring charges and favorable gross profit rates. The gross profit rate rose to 23.9% from 23.2%, supported by Best Buy Marketplace and Best Buy Ads growth and $34 million in IEEPA tariff refunds, partially offset by lower product margin rates.
Which product categories drove comparable sales growth?
Comparable sales grew 4.1% in the quarter, driven primarily by computing, home theater, AI glasses and trading cards. A comparable sales decline in the traditional gaming category partially offset this growth.
How did the International segment perform?
International revenue decreased 4.2% to $709 million, primarily due to a comparable sales decline in gaming, partially offset by mobile phone growth and unfavorable foreign exchange. Adjusted operating income fell to $13 million from $18 million, and the adjusted operating income rate declined to 1.8% from 2.4%.
How much did the company return to shareholders and what is remaining under its buyback program?
Dividends paid were $405 million for the first six months. Share repurchases totaled $36 million in the six-month period, versus $165 million a year earlier. The company had $2.97 billion remaining under its $5.0 billion repurchase authorization as of the end of the second quarter, with no expiration date.
What is the status of the tariff refunds and how do they affect results?
The company recorded $34 million of IEEPA tariff refunds in the second quarter, recognized as a reduction to cost of sales. An additional $41 million was refunded on September 2, 2026, and will be recorded in the third quarter. The filing states these refunds represent substantially all of the tariff refunds the company has requested.
04—Continue