01—Abstract
Summary
Summary of the 8-K filed August 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. (NYSE: BBY) reported results for the 13-week second quarter of fiscal 2026, ended August 2, 2025.
Enterprise revenue was $9.44 billiona, up from $9.29 billion a year earlier, and enterprise comparable sales rose 1.6%, which management described as its highest growth in three years. Diluted EPS was $0.87 versus $1.34 a year ago, and adjusted diluted EPS was $1.28 versus $1.34. GAAP operating income fell to $251 million (2.7% of revenue) from $383 million (4.1%), reflecting $114 million of restructuring charges tied to an enterprise-wide restructuring initiative that began in the quarter, including approximately $40 million of asset impairments.
Adjusted operating income was 3.9% of revenue versus 4.1% a year earlier. Gross profit rates declined in both segments, with Domestic at 23.4% (versus 23.5%) and International at 21.8% (versus 23.9%), which the company attributed to lower product margin rates and a higher mix of lower-margin categories. Best Buy reiterated its full-year fiscal 2026 guidance, including revenue of $41.1 billion to $41.9 billionb, comparable sales of (1.0%) to 1.0%, an adjusted operating income rate of approximately 4.2%, and adjusted diluted EPS of $6.15 to $6.30.
Management said it now trends toward the higher end of its sales range, but it chose to hold guidance because of uncertainty around potential tariff impacts in the second half. For the third quarter, the company expects comparable sales growth similar to Q2 and an adjusted operating income rate similar to last year's Q3 rate of 3.7%c. Sales momentum continued into August, according to management.
Capital returns in the quarter totaled $266 milliond, including $201 million of dividends and $65 million of share repurchases. Year to date, the company returned $568 million, and it expects to spend approximately $300 million on share repurchases in fiscal 2026. The board declared a regular quarterly dividend of $0.95 per share, payable October 9, 2025, to shareholders of record on September 18, 2025.
02—Key points
Key Highlights
- Enterprise revenue of $9,438 million in Q2 FY26 versus $9,288 million in Q2 FY25; enterprise comparable sales rose 1.6%, the company's highest growth in three years according to the CEO.
- Diluted EPS was $0.87 versus $1.34 a year ago; adjusted diluted EPS was $1.28 versus $1.34.
- GAAP operating income was $251 million (2.7% of revenue) versus $383 million (4.1%), reflecting $114 million of restructuring charges, including approximately $40 million of asset impairments.
- Domestic online revenue of $2.86 billion grew 5.1% on a comparable basis, and online represented 32.8% of Domestic revenue versus 31.5% last year.
- International revenue of $740 million rose 11.3%, driven by comparable sales growth of 7.6% and new Best Buy Express locations in Canada, though International gross profit rate fell to 21.8% from 23.9%.
- FY26 guidance was reiterated: revenue of $41.1 billion to $41.9 billion, adjusted diluted EPS of $6.15 to $6.30, and capital expenditures of approximately $700 million; the company is trending toward the higher end of its sales range.
- Quarterly dividend of $0.95 per share declared, payable October 9, 2025; the company expects to spend approximately $300 million on share repurchases in FY26.
03—Questions
Frequently Asked Questions
Why did GAAP operating income and EPS decline so sharply despite higher sales?
GAAP operating income fell to $251 million from $383 million, and diluted EPS fell to $0.87 from $1.34. The filing attributes much of the gap to $114 million of restructuring charges from an enterprise-wide restructuring initiative that began in Q2 FY26, including approximately $40 million of asset impairments. Gross profit rates were also lower, with Domestic at 23.4% versus 23.5% and International at 21.8% versus 23.9%.
Is Best Buy changing its full-year outlook?
No. The company reiterated its FY26 guidance from May 29, 2025, including revenue of $41.1 billion to $41.9 billion, comparable sales of (1.0%) to 1.0%, an adjusted operating income rate of approximately 4.2%, and adjusted diluted EPS of $6.15 to $6.30. Management said it is trending toward the higher end of its sales range but chose to maintain guidance given potential tariff impacts in the second half.
What does management expect for the third quarter?
Management expects comparable sales growth similar to what the company delivered in Q2, and an adjusted operating income rate similar to last year's Q3 rate of 3.7%. The CEO also said sales growth momentum continued into August, driven by back-to-school sales events.
How much cash is Best Buy returning to shareholders?
In Q2 FY26, the company returned $266 million, consisting of $201 million in dividends and $65 million in share repurchases. Year to date, it returned $568 million, including $403 million in dividends and $165 million in repurchases. The company expects to spend approximately $300 million on share repurchases during FY26, and the board declared a quarterly dividend of $0.95 per share payable October 9, 2025.
What drove the sales growth in the quarter?
On a weighted basis, the largest drivers of the Domestic comparable sales increase were gaming, computing and mobile phones. Declines in home theater, appliances, tablets and drones partially offset these gains. Management credited new technology innovation, its omni-channel customer experience and strong vendor partnerships, and the company noted that the newly launched Best Buy Marketplace is part of its second-half plans.
04—Continue