10-Q · June 5, 2026
Best Buy reported a strong Q1 FY27 with a revenue of $8.94 billion, exceeding estimates, while EPS came in at $1.31, higher than the forecast of $1.23. The company experienced growth in comparable sales driven by gaming…
Earnings analysis · 10-Q
BBY earnings analysis
Filed September 4, 2026 · Our reading of the company's report
The latest report
Best Buy delivered a strong Q2 fiscal 2027, with revenue up 3.6%, comparable sales up 4.1%, operating margin expanding 160 basis points to 4.3%, and diluted EPS rising to $1.48 from $0.87. Domestic performance drove the…
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Best Buy delivered a strong Q2 fiscal 2027, with revenue up 3.6%, comparable sales up 4.1%, operating margin expanding 160 basis points to 4.3%, and diluted EPS rising to $1.48 from $0.87. Domestic performance drove the improvement, supported by computing, home theater, AI glasses, trading cards, Marketplace and Ads, while International sales and margins declined. Operating cash flow and cash balances improved materially, although tariff uncertainty, international weakness and seasonal dependence on fourth-quarter cash generation remain important risks.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $1.48
What stood out
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Revenue and comps accelerated
Q2 revenue increased 3.6% to $9.779 billion from $9.438 billion, while comparable sales grew 4.1% versus 1.6% in the prior-year quarter.
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Material margin expansion
Gross margin expanded to 23.9% from 23.2%, and operating margin rose to 4.3% from 2.7%, driven by favorable gross profit rates and a $6 million restructuring benefit versus $114 million of restructuring charges a year earlier.
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EPS increased 70%
Diluted EPS increased to $1.48 from $0.87, while net earnings rose to $315 million from $186 million; the filing attributes the EPS increase primarily to higher operating income.
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Domestic segment drove growth
Domestic revenue rose 4.3% to $9.070 billion, with comparable sales up 4.5%. Computing and Mobile Phones comparable sales grew 6.8%, Consumer Electronics grew 5.6%, and Services grew 6.4%.
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Operating cash flow strengthened
Operating cash flow for the first six months increased to $1.296 billion from $783 million, primarily reflecting the timing and volume of inventory purchases and payments and the timing of income tax payments.
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Liquidity position improved
Cash and cash equivalents reached $2.255 billion versus $1.738 billion at January 31, 2026 and $1.456 billion a year earlier; the company also had $1.25 billion of undrawn revolving-credit capacity.
What to watch
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Tariff and trade-policy volatility
Trade-policy uncertainty remains material: the company received $34 million of IEEPA tariff refunds in Q2 and expects to record an additional $41 million refund in Q3, while stating that it cannot predict the ultimate impact of tariffs on future operations and cash flows.
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International sales and FX pressure
International weakness could pressure consolidated results: Q2 International revenue declined 4.2% to $709 million, comparable sales fell 1.8%, and adjusted operating margin declined to 1.8% from 2.4%. Foreign exchange reduced Q2 revenue by approximately $12 million.
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Cash-flow and liquidity dependence
Cash generation is seasonally concentrated and future liquidity is not guaranteed. The company reported $1.296 billion of operating cash flow in the first six months but cautioned that it may need to limit spending if liquidity is insufficient; its $1.25 billion revolving facility had no borrowings outstanding as of August 1, 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided in the 10-Q. Management said it expects to increase the Domestic Best Buy store count by an additional 2 stores by the end of fiscal 2027 and believes liquidity will be sufficient to fund anticipated capital expenditures, dividends, share repurchases and strategic initiatives.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.