Why did GAAP earnings fall so sharply in Q3 FY26?

GAAP diluted EPS fell to $0.66 from $1.26 mainly because of Best Buy Health impairments totaling $192 million pre-tax, including $171 million of goodwill and intangible asset impairments. The impairments reflect downward revisions to longer-term projections, partly due to pressure in the Medicaid and Medicare Advantage markets. The nondeductible goodwill impairment also lifted the GAAP effective tax rate to 31.5% from 23.9%.

How did the company's core operating performance compare with last year?

Adjusted operating income as a percentage of revenue was 4.0% in Q3 FY26 versus 3.7% in Q3 FY25, and adjusted diluted EPS was $1.40 versus $1.26. Enterprise comparable sales grew 2.7%, with computing, gaming and mobile phones cited as the leading drivers.

What changed in the FY26 financial guidance?

The company raised adjusted diluted EPS guidance to $6.25 to $6.35 from $6.15 to $6.30, revenue guidance to $41.65 billion to $41.95 billion from $41.1 billion to $41.9 billion, and comparable sales guidance to 0.5% to 1.2% from (1.0%) to 1.0%. The adjusted effective income tax rate outlook rose to approximately 25.4% from approximately 25.0%, while the adjusted operating income rate of approximately 4.2% and capital expenditures of approximately $700 million were unchanged.

What returns are shareholders receiving?

The board authorized a regular quarterly cash dividend of $0.95 per common share, payable January 6, 2026, to shareholders of record at the close of business on December 16, 2025. In Q3 FY26 the company returned $234 million through dividends of $199 million and share repurchases of $35 million. The company still expects to spend approximately $300 million on share repurchases during FY26.

How did the segments perform?

Domestic revenue was $8.88 billion, up 2.1%, with a gross profit rate of 23.3% versus 23.6% last year. International revenue was $794 million, up 6.1%, with comparable sales growth of 6.3% and a gross profit rate of 22.8% versus 22.5%. International adjusted operating income was $28 million versus $13 million a year earlier.

BBY 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed November 25, 2025. Cited figures are marked; the original filing is the authoritative source.

Best Buy Co., Inc. (NYSE: BBY) reported third-quarter fiscal 2026 results for the 13-week period ended November 1, 2025.

Revenue was $9.67 billion^a, up from $9.45 billion a year earlier, with enterprise comparable sales increasing 2.7% (versus a decline of 2.9% in Q3 FY25). GAAP diluted EPS was $0.66 compared with $1.26 last year, while adjusted diluted EPS was $1.40, flat with the prior-year figure of $1.26. The GAAP results were weighed down by $192 million of non-cash impairments tied to Best Buy Health, including a $171 million goodwill and intangible asset impairment, which also drove the GAAP effective tax rate up to 31.5%.

The company raised its FY26 adjusted diluted EPS guidance to $6.25 to $6.35^b from the prior $6.15 to $6.30, and raised revenue guidance to $41.65 billion to $41.95 billion from $41.1 billion to $41.9 billion. Comparable sales guidance was raised to 0.5% to 1.2% from (1.0%) to 1.0%. Adjusted operating income rate guidance of approximately 4.2% was unchanged, while the adjusted effective tax rate outlook was raised to approximately 25.4% from approximately 25.0%.

For Q4, the company expects comparable sales of (1.0%^c) to 1.0% and an adjusted operating income rate of 4.8% to 4.9%. Domestic comparable sales grew 2.4%, led by computing, gaming and mobile phones, and online comparable sales rose 3.5%.

International comparable sales increased 6.3%. The board declared a regular quarterly dividend of $0.95^d per share, payable January 6, 2026, to holders of record on December 16, 2025, and the company still expects to spend approximately $300 million on share repurchases in FY26.

02—Key points

Key Highlights

Enterprise revenue of $9.67 billion in Q3 FY26, up from $9.45 billion in Q3 FY25; comparable sales rose 2.7% after a 2.9% decline a year earlier.
GAAP diluted EPS of $0.66 versus $1.26 last year, reflecting $192 million of pre-tax Best Buy Health impairments; adjusted diluted EPS was $1.40 versus $1.26.
Domestic comparable sales increased 2.4% and domestic online comparable sales increased 3.5%; International comparable sales increased 6.3%.
FY26 adjusted diluted EPS guidance raised to $6.25 to $6.35 from $6.15 to $6.30; revenue guidance raised to $41.65 billion to $41.95 billion.
Q4 outlook calls for comparable sales of (1.0%) to 1.0% and an adjusted operating income rate of 4.8% to 4.9%.
Gross profit rate for the enterprise was 23.2% versus 23.5% a year earlier; domestic gross profit rate was 23.3% versus 23.6%.
Quarterly dividend of $0.95 per share declared, payable January 6, 2026; approximately $300 million in share repurchases still expected for FY26.

03—Questions

Frequently Asked Questions

Why did GAAP earnings fall so sharply in Q3 FY26?
GAAP diluted EPS fell to $0.66 from $1.26 mainly because of Best Buy Health impairments totaling $192 million pre-tax, including $171 million of goodwill and intangible asset impairments. The impairments reflect downward revisions to longer-term projections, partly due to pressure in the Medicaid and Medicare Advantage markets. The nondeductible goodwill impairment also lifted the GAAP effective tax rate to 31.5% from 23.9%.
How did the company's core operating performance compare with last year?
Adjusted operating income as a percentage of revenue was 4.0% in Q3 FY26 versus 3.7% in Q3 FY25, and adjusted diluted EPS was $1.40 versus $1.26. Enterprise comparable sales grew 2.7%, with computing, gaming and mobile phones cited as the leading drivers.
What changed in the FY26 financial guidance?
The company raised adjusted diluted EPS guidance to $6.25 to $6.35 from $6.15 to $6.30, revenue guidance to $41.65 billion to $41.95 billion from $41.1 billion to $41.9 billion, and comparable sales guidance to 0.5% to 1.2% from (1.0%) to 1.0%. The adjusted effective income tax rate outlook rose to approximately 25.4% from approximately 25.0%, while the adjusted operating income rate of approximately 4.2% and capital expenditures of approximately $700 million were unchanged.
What returns are shareholders receiving?
The board authorized a regular quarterly cash dividend of $0.95 per common share, payable January 6, 2026, to shareholders of record at the close of business on December 16, 2025. In Q3 FY26 the company returned $234 million through dividends of $199 million and share repurchases of $35 million. The company still expects to spend approximately $300 million on share repurchases during FY26.
How did the segments perform?
Domestic revenue was $8.88 billion, up 2.1%, with a gross profit rate of 23.3% versus 23.6% last year. International revenue was $794 million, up 6.1%, with comparable sales growth of 6.3% and a gross profit rate of 22.8% versus 22.5%. International adjusted operating income was $28 million versus $13 million a year earlier.

04—Continue

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