Best Buy — Q2 FY27 Earnings Summary

Financial Performance

• Enterprise revenue increased to $9.779 billion in Q2 FY27 from $9.438 billion in Q2 FY26.
• Diluted EPS rose 70% to $1.48, compared to $0.87 in the prior year period.
• Adjusted diluted EPS increased 15% to $1.47, up from $1.28 in Q2 FY26.
• Operating income as a percentage of revenue improved to 4.3% from 2.7% in the prior year.
• Adjusted operating income as a percentage of revenue was 4.3%, compared to 3.9% in the prior year.
• Domestic segment revenue was $9.07 billion, a 4.3% increase from $8.698 billion.
• International segment revenue was $709 million, a 4.2% decrease from $740 million.
• Domestic gross profit rate was 24.0% versus 23.4% in the prior year.
• International gross profit rate was 22.3% versus 21.8% in the prior year.
• Cash and cash equivalents were $2.255 billion as of August 1, 2026, compared to $1.456 billion in the prior year.
• Total current liabilities were $8.936 billion as of August 1, 2026, compared to $8.553 billion in the prior year.
• Deferred revenue was $912 million as of August 1, 2026, compared to $889 million in the prior year.
• Total debt (current and long-term) was $1.169 billion as of August 1, 2026, compared to $1.174 billion in the prior year.

Guidance and Future Outlook

• Raised FY27 comparable sales guidance to 1.9% to 3.0%, compared to prior guidance of (1.0%) to 1.0%.
• Raised FY27 adjusted diluted EPS guidance to $6.70 to $6.90, compared to prior guidance of $6.30 to $6.60.
• Raised FY27 revenue guidance to $42.3 billion to $42.8 billion, compared to prior guidance of $41.2 billion to $42.1 billion.
• Raised FY27 adjusted operating income rate guidance to 4.4% to 4.5%, compared to prior guidance of 4.3% to 4.4%.
• Maintained FY27 adjusted effective income tax rate guidance at approximately 25.5%.
• Maintained FY27 capital expenditures guidance at approximately $750 million.
• Provided Q3 FY27 comparable sales guidance of 1.0% to 3.0%.
• Provided Q3 FY27 adjusted operating income rate guidance of 4.1% to 4.2%.

Business Segments and Product Lines

• Enterprise comparable sales increased 4.1% in Q2 FY27, compared to 1.6% in the prior year.
• Domestic comparable sales increased 4.5% in Q2 FY27, compared to 1.1% in the prior year.
• Domestic comparable online sales increased 5.1% in Q2 FY27, matching the 5.1% increase in the prior year.
• International comparable sales declined 1.8% in Q2 FY27, compared to a 7.6% increase in the prior year.
• Domestic online revenue was $3.00 billion, representing 33.1% of total domestic revenue, up from 32.8% in the prior year.
• Computing, home theater, and emerging categories (including AI glasses and trading cards) drove domestic comparable sales growth.
• Traditional gaming category performance declined, partially offsetting growth drivers.
• Services revenue accounted for 9% of domestic revenue mix in Q2 FY27.
• Computing and Mobile Phones accounted for 46% of domestic revenue mix in Q2 FY27.
• Best Buy Ads and Marketplace initiatives contributed to growth in gross profit rates.
• IEEPA tariff refunds of approximately $34 million contributed to the higher domestic gross profit rate.

Market and Competitive Landscape

• The company reported a healthy demand environment for its categories.
• The company positioned itself at the intersection of technology, services, and human connection.
• The company cited competition from multi-channel retailers, e-commerce businesses, technology service providers, and mobile network carriers in forward-looking statements.

Risks and Challenges

• Macroeconomic pressures including inflation, recession, consumer confidence, and interest rates.
• Geopolitical pressures including trade policies, tariff increases, and foreign currency exchange rate volatility.
• Technological advancements and product life cycle fluctuations.
• Supply chain interruptions and reliance on key vendors.
• Cybersecurity and privacy breach risks.
• Dependence on cash flows and net earnings generated during the fourth fiscal quarter.

Management Commentary and Tone

• CEO Corie Barry expressed pleasure at outperforming expectations with 4.1% comparable sales growth and higher-than-expected adjusted operating income.
• Barry noted the company's evolution into a stronger, more resilient business and its unique role in customer lives.
• Incoming CEO Jason Bonfig (effective November 1, 2026) attributed strong results to deliberate actions, investments in specialty expertise, vendor partnerships, and supply chain improvements.
• Bonfig expressed appreciation for employee commitment and execution of strategy.

Other Key Points

• Restructuring charges were reduced to a $6 million benefit in Q2 FY27, compared to $114 million in charges in the prior year.
• The company returned $239 million to shareholders in Q2 FY27 via $203 million in dividends and $36 million in share repurchases.
• Year-to-date shareholder returns totaled $441 million ($405 million in dividends and $36 million in repurchases).
• The company expects to spend approximately $300 million on share repurchases during FY27.
• The Board authorized a regular quarterly cash dividend of $0.96 per common share, payable October 8, 2026, to shareholders of record on September 17, 2026.
• The company announced a conference call for August 27, 2026, at 8:00 a.m. Eastern Time.