Why did Best Buy lower its FY26 guidance?

The company updated its full-year guidance to incorporate the impact of tariffs, with management assuming tariffs remain at current levels for the rest of the year and no material change in consumer behavior from recent trends.

What drove the decline in GAAP operating income and EPS this quarter?

GAAP operating income fell to $219 million from $312 million, primarily because of $109 million of restructuring charges, mainly asset impairments and other costs tied to a restructuring initiative in the Best Buy Health business. Those charges also lowered GAAP diluted EPS to $0.95 from $1.13, and the GAAP effective tax rate was 8.6% versus 24.7% last year.

How did the Domestic and International segments perform?

Domestic revenue was $8.13 billion, down 0.9%, with domestic online revenue up 2.1% on a comparable basis to $2.58 billion. International revenue was $640 million, down 0.6%, mainly due to a negative foreign currency impact of approximately 450 basis points, partly offset by revenue from new Best Buy Express locations in Canada.

What is the company's capital return plan?

In Q1 FY26 Best Buy returned $302 million to shareholders, including $202 million in dividends and $100 million in share repurchases. The board declared a $0.95 quarterly dividend payable July 10, 2025, and the company expects to spend approximately $300 million on share repurchases during FY26.

BBY 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 29, 2025. Cited figures are marked; the original filing is the authoritative source.

Best Buy Co., Inc. reported first-quarter fiscal 2026 results for the 13-week period ended May 3, 2025, furnished in a news release (Exhibit 99).

Revenue was $8,767 million^a versus $8,847 million a year earlier, enterprise comparable sales decreased 0.7%, and diluted EPS was $0.95 compared with $1.13 last year. Adjusted diluted EPS was $1.15 versus $1.20. GAAP operating income fell to $219 million (2.5% of revenue) from $312 million (3.5%), reflecting $109 million of restructuring charges primarily tied to a Best Buy Health restructuring initiative that commenced in Q1 FY26.

Adjusted operating income was 3.8% of revenue, flat with the prior year. Management updated FY26 guidance to incorporate the impact of tariffs. Enterprise revenue guidance is now $41.1 billion to $41.9 billion^b (prior $41.4 billion to $42.2 billion), comparable sales are expected to be (1.0%) to 1.0% (prior 0.0% to 2.0%), and adjusted diluted EPS is now $6.15 to $6.30 (prior $6.20 to $6.60).

The adjusted operating income rate is expected to be approximately 4.2%, within the prior range's lower bound, and capital expenditures are now approximately $700 million^c (prior $700 million to $750 million). For Q2 FY26, comparable sales are expected to be slightly down year over year, with an adjusted operating income rate of approximately 3.6%.

Capital returns in the quarter totaled $302 million^d, including $202 million in dividends and $100 million in share repurchases. The board authorized a regular quarterly dividend of $0.95 per share, payable July 10, 2025, to holders of record on June 19, 2025, and the company expects to spend approximately $300 million on share repurchases in FY26.

02—Key points

Key Highlights

Q1 FY26 revenue of $8,767 million, down from $8,847 million; enterprise comparable sales declined 0.7%, with domestic online comparable sales up 2.1%.
GAAP diluted EPS of $0.95 versus $1.13 a year earlier; adjusted diluted EPS of $1.15 versus $1.20.
GAAP operating income of $219 million (2.5% of revenue) versus $312 million, driven by $109 million of restructuring charges related to Best Buy Health.
FY26 revenue guidance lowered to $41.1–$41.9 billion from $41.4–$42.2 billion; adjusted diluted EPS guidance lowered to $6.15–$6.30 from $6.20–$6.60, with management citing tariffs.
FY26 comparable sales guidance revised to (1.0%) to 1.0% from 0.0% to 2.0%; adjusted operating income rate expected at approximately 4.2%.
Domestic gross profit rate improved to 23.5% from 23.4%, while International gross profit rate fell to 22.0% from 22.8%.
Board declared a quarterly dividend of $0.95 per share, payable July 10, 2025; approximately $300 million in FY26 share repurchases expected.

03—Questions

Frequently Asked Questions

Why did Best Buy lower its FY26 guidance?
The company updated its full-year guidance to incorporate the impact of tariffs, with management assuming tariffs remain at current levels for the rest of the year and no material change in consumer behavior from recent trends.
What drove the decline in GAAP operating income and EPS this quarter?
GAAP operating income fell to $219 million from $312 million, primarily because of $109 million of restructuring charges, mainly asset impairments and other costs tied to a restructuring initiative in the Best Buy Health business. Those charges also lowered GAAP diluted EPS to $0.95 from $1.13, and the GAAP effective tax rate was 8.6% versus 24.7% last year.
How did the Domestic and International segments perform?
Domestic revenue was $8.13 billion, down 0.9%, with domestic online revenue up 2.1% on a comparable basis to $2.58 billion. International revenue was $640 million, down 0.6%, mainly due to a negative foreign currency impact of approximately 450 basis points, partly offset by revenue from new Best Buy Express locations in Canada.
What is the company's capital return plan?
In Q1 FY26 Best Buy returned $302 million to shareholders, including $202 million in dividends and $100 million in share repurchases. The board declared a $0.95 quarterly dividend payable July 10, 2025, and the company expects to spend approximately $300 million on share repurchases during FY26.

04—Continue

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