BBY · Q4 2025 Earnings

Cautious

Best Buy

Reported March 3, 2026

30-second summary

30-second take: Best Buy delivered a Q4 beat — enterprise comps -0.8% landed inside the (1.0%)–1.0% guide, adjusted operating income rate of 5.0% beat the 4.8–4.9% plan, and adjusted EPS of $2.61 carried FY26 adj EPS to $6.43 (above the prior $6.25–$6.35 guide). But FY27 was guided to (1.0%)–1.0% comps, with Q1 FY27 adj operating margin guided to ~3.9% on ~+1% comps. The FY27 comp range now allows negative comps, versus the prior 0.5%–1.2% range for FY26 — a materially wider and lower forward setup. Layered on top: full-year FY26 goodwill and intangible asset impairments of $171M tied to Best Buy Health, and continued deterioration in two of Best Buy's higher-margin categories (Appliances -10.5%, Consumer Electronics -7.3%).

Headline numbers

EPS

Q4 FY2025

$2.61

Revenue

Q4 FY2025

$13.81B

-1.0% YoY

Gross margin

Q4 FY2025

20.9%

Operating margin

Q4 FY2025

5.2%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2026	QoQ
Revenue	$13.81B	-1.0%	$9.67B	+42.8%
EPS	$2.61	—	$1.40	+86.4%
Gross margin	20.9%	—	23.2%	-230bps
Operating margin	5.2%	—	2.0%	+320bps

Guidance

FY2025 full-year EPS raised and operating margin expanded, but FY2026 comparable sales guide widened to allow for a flat-to-negative range, signaling caution on near-term growth momentum.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	(1.0%) to 1.0% comparable sales growth	$13.814 billion; -0.96% YoY	within guide range (slight miss on comp sales but revenue in expected zone)	Met
Adjusted Operating Income Rate	Q4 FY2025	4.8% to 4.9%	5.0%	+110-120 bps above guide	Missed

New guidance

Metric	Period	Guide	YoY
Comparable Sales Growth	Q1 FY2026	approximately 1%	—
Adjusted Operating Income Rate	Q1 FY2026	approximately 3.9%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted Diluted EPS	FY2025	$6.25 to $6.35	$6.30 to $6.60	+$0.05–0.25 (low raised by $0.05, high raised by $0.25)	Raised
Comparable Sales Growth	FY2025	0.5% to 1.2%	(1.0%) to 1.0%	narrowed/widened with downside risk; range shifts to include negative territory	Raised
Adjusted Operating Income Rate	FY2025	approximately 4.2%	4.3% to 4.4%	+10–20 bps	Raised
Adjusted Effective Income Tax Rate	FY2025	approximately 25.4%	approximately 25.5%	+10 bps	Raised
Capital Expenditures	FY2025	approximately $700 million	approximately $750 million	+$50 million	Raised

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Domestic Segment	$12.575B	-1.1%
International Segment	$1.239B	+0.5%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Comparable Sales Growth - Enterprise	-0.8%
Comparable Sales Growth - Domestic	-0.8%
Comparable Sales Growth - International	-1.3%
Domestic Online Comparable Sales Growth	-2.3%
Domestic Online Revenue % of Total	39.0%

Profitability

Q4 FY2025

Segment	Q4 FY2025
Adjusted Operating Income Rate	5.0%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Share Repurchase Authorization	$300 million FY27
Quarterly Dividend per Share	$0.96

Management tone

Best Buy Health remains a strategic drag. Full-year FY26 goodwill and intangible asset impairments totaled $171M, all tied to Best Buy Health per the non-GAAP reconciliation footnotes. The company also recorded a $190M FY26 restructuring charge, with the press release attributing portions to "a restructuring initiative within the company's Best Buy Health business that commenced in Q1 FY26" and disclosed the disposal of a component of the Best Buy Health business during the year. Health is clearly not a forward growth pillar.

The guidance posture widened from confident-and-narrow to wide-and-conditional. The prior FY26 comp range was 0.5%–1.2%; the FY27 range is (1.0%)–1.0%. Allowing negative comps in the forward range — and guiding FY27 adj op income rate (4.3–4.4%) only modestly above the FY26 outcome (4.3%) — is the textbook posture of a management team that doesn't see near-term acceleration.

Marketplace and Ads remain qualitative-only. The Q4 release described Marketplace as "launched and scaled" and Best Buy Ads as having "almost doubl[ed] the number of ad partners," but provided no GMV, take rate, 3P revenue, or ads revenue. The absence of any quantitative disclosure on the largest-discussed new profit streams is itself a signal — if the metrics were meaningfully ahead of plan, they would be disclosed.

Recurring themes management leaned on this quarter:

Tariff uncertainty and mitigation urgencyDigital marketplace and advertising as new profit streamsOmnichannel experience optimization (search, personalization, AI)Consumer value-focus and deal sensitivity persistingOperational efficiency and cost automation offsetting pressuresBest Buy Health strategic recalibration

Risks management surfaced:

Tariff impact: estimated negative 1 point of comparable sales if China tariffs remain at 10% through FY26Consumer spending pressure from persistent high inflationVendor pass-through of tariff costs driving likely price increasesBest Buy Health market scaling slower than forecastedMarketplace startup costs and cannibalization of first-party revenue

Q&A highlights

Christopher Horvath · JP Morgan

Does the 1% tariff headwind assume price increases with unit elasticity offsetting costs? Is each 1 comp point equivalent to 20 cents EPS? How do tariffs scale non-linearly if they increase from 10% to 20%?

Management estimated 10% China tariffs at ~1% negative comparable sales impact, combining unit decreases and slight ASP increases. They emphasized tariffs are not linear and difficult to model due to unprecedented breadth across industries. Mexico represents ~20% of sourcing, significantly impacting exclusive brands and TVs. Non-linear pricing and consumer elasticity make doubling tariff impact incorrect.

10% tariff estimated at ~1% negative comparable sales impactMexico sourcing at approximately 20% of totalMexico tariffs impact exclusive brands, large-screen TVs, and appliancesNon-linear impact if tariffs increase; cannot assume doubling effect

Brian Nagel · Oppenheimer

What flexibility exists in supply chain to mitigate tariffs through sourcing diversification? How should we model operating leverage with investments in ads and marketplace offsetting sales growth benefits?

Management outlined multiple mitigation levers: constant vendor communication at SKU level, supply chain adjustments (only 2-3% direct imports), continued exclusive brands diversification, pricing analysis, demand evaluation, and policy engagement. On leverage, they expect core operating leverage on sales growth but note investments in ads/marketplace offset some benefits; high-end guidance assumes expansion despite investments.

Only 2-3% of COGS directly importedAverage 6 weeks of supply in inventoryExclusive brands already diversified; additional diversification not quickMultiple mitigation actions underway including vendor coordination and pricing analysis

Jonathan Matuszewski · Jefferies

What learnings from Canadian marketplace success are being replicated in the U.S.? Why shouldn't U.S. marketplace achieve Canada's 25% 3P penetration rate?

Canadian marketplace showed demand for deeper assortment, capturing latent demand. U.S. will differ by emphasizing new products and multiple SKU versions (vs. Canada's refurb focus). Management cautious on achieving Canada's 1-in-4 3P ratio, citing different product mix skew and refurb overlap. Trajectory unclear but bullish on deeper assortment value.

Canadian marketplace: ~25% 3P seller penetration (1 of 4 items)Canada marketplace historically skewed toward refurb/rebuilt productsU.S. approach: deeper assortment of new products with multiple SKU versionsCanada now evolving toward more new product, less refurb

Michael Lasser · QVS

What level of pricing basis points will the industry implement if tariffs persist? Will pricing adjust quickly if tariffs are temporary, or will it be sticky?

Management declined to quantify precise pricing basis points, citing complexity involving vendor absorption, timing, competitive landscape, and consumer pass-through. Emphasized pricing is not Best Buy's unilateral decision but industry-wide value chain issue. Objective remains competitive pricing across spectrum while managing cost increases with vendors.

Cannot provide precise basis point estimate for pricing increasesTariffs will result in price increases (stated as certainty)Pricing is vendor and industry-wide decision, not Best Buy alone6-week supply cycle means cost increases work through slowly

Anthony Chukumba · Loop Capital Markets

How did Best Buy's Q4 comp performance compare to industry? Did you gain or lose share? What tailwinds can gaming (Nintendo Switch, GTA 6) provide toward guidance?

Q4 share flattish vs. industry. Full-year share gains in computing and gaming; reached 30-year high in gaming console share. Some challenged areas due to value-seeking behavior. Nintendo Switch and GTA 6 expected to drive hardware, accessories, and customer engagement. Store modifications underway to optimize gaming experiences.

Q4 market share: flattish vs. industryFull-year: share gains in computing and gamingGaming console share at 30-year highNintendo Switch coming this year with store enhancements planned

Answers to last quarter's watch list

Q4 FY2026 comp delivery within the (1.0%)–1.0% range, and whether the +0.5% FY floor is preserved. Q4 comp -0.8% landed inside the guided range, at the low end. FY26 comp came in at +0.5% — exactly at the low end of the raised 0.5%-1.2% range. Floor held, but only barely. Status: Resolved neutrally.

Q4 FY2026 adj. operating income rate vs. the 4.8-4.9% guide. 5.0% printed, beating the high end by 10bps. This was the cleanest beat of the quarter.

Resolved positively

Gross margin print and the ~15bps FY decline framing. Q4 GM 20.9%, FY26 GM 22.5%. The ~15bps FY decline framing held approximately; promotional intensity in Q4 was absorbed without further GM deterioration.

Resolved positively

Appliances trajectory. Appliances comp printed -10.5% in Q4 FY26, versus -11.4% in Q4 FY25 — still a deep double-digit decline. The category remains a structural problem.

Resolved negatively

Marketplace quantitative disclosure. No GMV, take rate, or 3P revenue figures disclosed in Q4.

Resolved negatively

Best Buy Health follow-through. FY26 goodwill and intangible asset impairments totaled $171M for the year, all tied to Best Buy Health, with additional Health-related restructuring inside the $190M FY26 restructuring charge and a disposal of a Best Buy Health component.

Resolved negatively

What to watch into next quarter

Q1 FY27 comp vs. the ~+1% guide. Q1 sets the tone for whether the FY27 (1.0%)–1.0% range biases toward the low or high end. A Q1 print meaningfully below 0% would force a re-rate of the FY27 outlook.

Appliances trajectory — three quarters of double-digit decline demand a structural answer. If Q1 FY27 prints another high-single-digit-or-worse decline, management will need to disclose a category restructuring plan or admit Best Buy has lost a structural share position in white goods.

Consumer Electronics reversal. CE comp deteriorated to -7.3% in Q4 from -2.2% in the prior-year Q4. Watch whether this was holiday-specific (deal sensitivity on home theater) or the start of a multi-quarter slide.

Marketplace and Ads quantitative disclosure. Continued qualitative-only commentary would force investors to assume contribution is immaterial. Watch for any GMV, take rate, ads revenue, or 3P revenue figure — even a single data point would change the framing.

Q1 FY27 adj. operating income rate vs. the ~3.9% guide. Q1 is the first test of whether the FY27 4.3–4.4% rate is achievable given the back-half-weighted profile.

Best Buy Health — further restructure or divestiture. With $171M of FY26 goodwill/intangible impairments tied to Health, Health-related restructuring charges, and a Health component disposal already executed in FY26, watch for further wind-down, divestiture, or segment reorganization activity.

Sources

Best Buy Q4 FY2026 press release, filed 2026-03-03 — https://www.sec.gov/Archives/edgar/data/764478/000076447826000005/bby-fy26q4xexx99.htm
Best Buy Q1, Q2, Q3 FY2026 prior-quarter Tapebrief coverage (for cross-quarter watch-list resolution)

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