BEST BUY CO INC (NYSE:BBY) Reports Mixed Q2 FY26 Results, Beating Revenue and EPS Estimates

BEST BUY CO INC (NYSE:BBY) delivered a mixed second quarter performance, surpassing analyst expectations on key metrics while navigating margin pressures and significant restructuring costs. The electronics retailer reported Q2 FY26 revenue of $9.44 billion, exceeding analyst estimates of $9.33 billion and representing a 1.6% year-over-year increase—the company's strongest comparable sales growth in three years. Adjusted earnings per share came in at $1.28, beating consensus estimates of $1.22.

Financial Performance Overview

The revenue outperformance was primarily driven by strong consumer demand in gaming, computing, and mobile phones, which helped offset declines in home theater, appliances, tablets, and drones. Domestic comparable sales grew 1.1%, while international markets showed remarkable strength with 7.6% comparable sales growth. Online sales continued their positive trajectory, with domestic comparable online sales increasing 5.1% and representing 32.8% of total domestic revenue.

Despite the revenue beat, profitability metrics showed some strain. Gross profit margin declined slightly to 23.2% from 23.5% in the prior-year period, primarily due to product mix shifts toward lower-margin categories. The company recorded $114 million in restructuring charges related to an enterprise-wide initiative aimed at realigning resources with changing consumer behaviors. These charges significantly impacted GAAP earnings, which fell to $0.87 per share compared to $1.34 per share in Q2 FY25.

Market Reaction and Guidance

The market reaction has been cautious, with shares declining approximately 3.2% in premarket trading following the earnings release. This reaction appears to reflect concerns about margin pressure and the maintained full-year guidance despite the quarterly beat. Management reiterated their FY26 outlook, projecting revenue between $41.1 billion and $41.9 billion, comparable sales between -1.0% and 1.0%, and adjusted diluted EPS between $6.15 and $6.30.

CEO Corie Barry attributed the stronger-than-expected sales to "new technology innovation, our relentless focus on a seamless omni-channel customer experience and our strong vendor partnerships." However, CFO Matt Bilunas noted uncertainty around potential tariff impacts in the second half of the year, stating the company believes it is "trending toward the higher end of our sales range" but maintaining conservative guidance due to these external factors.

Strategic Initiatives and Capital Allocation

The company continues to return capital to shareholders, distributing $266 million through dividends and share repurchases during the quarter. Year-to-date, Best Buy has returned $568 million to shareholders and expects to spend approximately $300 million on share repurchases during FY26. The board also announced a regular quarterly cash dividend of $0.95 per common share payable in October.

For a detailed breakdown of future earnings projections and historical performance, readers can review additional earnings estimates and data.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.