Best Buy Co., Inc.

What they do

Best Buy operates an omnichannel retail platform with stores, online, and in-home services across the U.S. and Canada. It sells computing and mobile phones, consumer electronics, appliances, entertainment products, and services such as installation, repair, memberships, and advertising. The Domestic segment includes all U.S. operations and Best Buy Health; the International segment covers Canada. Merchandise, pricing, supply chain, and marketing are centrally managed.

Revenue drivers

• Computing and Mobile Phones — Largest product category, including desktops, notebooks, mobile phones, tablets, and wearables; generated strong comparable sales growth in Q1 FY27.
• Consumer Electronics — Includes home theater, televisions, soundbars, digital imaging, and smart home; a significant portion of revenue, though growth was partially offset by appliance declines.
• Services — Includes advertising (Best Buy Ads), marketplace commissions, memberships, installation, and repair; growing profit stream, with revenue reclassified to include credit card and digital content revenue in FY27.
• Appliances — Large and small appliances; a major category but declined in Q1 FY27, partially offsetting overall growth.

Recent performance

For the first quarter ended May 2, 2026, Best Buy reported enterprise revenue of $8.94 billion, up from $8.77 billion a year earlier, with comparable sales up 2.0%. Domestic revenue rose 1.5% to $8.25 billion; International revenue rose 7.3% to $687 million. Diluted EPS increased 38% to $1.31, and adjusted diluted EPS increased 11% to $1.28. The company reiterated its FY27 adjusted diluted EPS guidance of $6.30 to $6.60.

Strategy

Best Buy is focused on advancing as a Retail, Media and Advertising, and Technology company, scaling profit streams like Best Buy Ads and Marketplace. Management's stated priorities include expanding reach, elevating the customer experience, and being human-powered and customer-focused. The company continues to invest in omnichannel capabilities, including ship-from-store and curbside pickup. Leadership transition is planned, with Jason Bonfig becoming CEO effective November 1, 2026.

Risks

• Macroeconomic pressure on consumer spending — Consumer demand for discretionary electronics is sensitive to inflation, recession, and interest rates, which could reduce purchases and services.
• Competition from online and big-box retailers — Intense competition from e-commerce and discount chains could pressure pricing and market share.
• Supply chain and inventory disruptions — Disruptions in global supply chains could affect product availability and increase costs.
• Dependence on service and membership growth — Profit growth relies on scaling new streams like Best Buy Ads and Marketplace, which may not achieve expected scale.

Outlook

Management reiterated FY27 guidance of revenue between $41.2 billion and $42.1 billion, comparable sales change of -1.0% to 1.0%, and adjusted operating income rate of 4.3% to 4.4%. Q2 comparable sales are expected to grow approximately 1.0%, with adjusted operating income rate around 3.9%. The CEO noted month-to-date May comparable sales were up high single digits.