Best Buy Co., Inc. Q3 FY2026 earnings call

• Q3 revenue was $9.7 billion, adjusted operating income rate was 4%, and adjusted EPS increased 11% to $1.40. Comparable sales growth was 2.7%. • Strong sales performance in computing (seventh consecutive quarter of positive comps), gaming (demand for Nintendo Switch 2, handheld gaming, AR glasses), and mobile phones (expanded partnerships and in-store model improvements). • Strategy initiatives: Omnichannel experiences like store refreshes/upgrades, expanded merchandising areas, IKEA pilots; digital experience growth with app usage; Best Buy marketplace with over 1,000 sellers and 11x more SKUs; retail media network with ad initiatives; holiday season plans with promotions, trade-in program, and marketing campaigns.

Domestic segment: Revenue increased 2.1% to $8.9 billion, driven by comparable sales growth of 2.4%. Online revenue of $2.8 billion increased 3.5% on a comparable basis and represented 31.8% of domestic revenue. International segment: Revenue increased 6.1% to $794 million, primarily due to comparable sales growth of 6.3%, partially offset by foreign exchange rate impact.

• Fourth quarter comparable sales expected to be in the range of down 1% to up 1%. • Fourth quarter adjusted operating income rate expected to be 4.8% to 4.9%. • Full year fiscal '26 guidance: revenue $41.65 billion to $41.95 billion, comparable sales growth 0.5% to 1.2%, adjusted operating income rate ~4.2%, adjusted diluted EPS $6.25 to $6.35, capital expenditures ~$700 million.

Q: Simeon Gutman with Morgan Stanley asked about the puts and takes on Q4 and difference in thinking from 3 months ago.

A: Matthew Bilunas responded that the high end of Q4 sales guide is similar to prior, raised bottom end of sales guide, slightly lowered EBIT expectations due to revenue adjustments.

Q: Peter Keith with Piper Sandler asked about Q4 decel in outlook and marketplace challenges.

A: Matthew Bilunas said Q4 comparisons tougher, Corie Barry mentioned marketplace has over 1,000 sellers, 11x more SKUs, early indicators healthy but early in ramp.

Q: Joe Feldman with Telsey Advisory Group asked about loyalty program and store investment.

A: Corie Barry talked about membership program with over 100 million members, focus on personalized promotions; store investment on look and feel, store updates, small format stores.

Q: Gregory Melich with Evercore asked about tariffs and labor with vendors.

A: Matthew Bilunas said tariffs included in ASPs, Corie Barry discussed vendor labor partnership and operating model.

Q: Jonathan Matuszewski with Jefferies asked about Agentic Commerce and retail media spend.

A: Corie Barry focused on customer experience, Matthew Bilunas said continue to invest in marketplace and ads business for long-term rate leverage.

Q: Seth Sigman with Barclays asked about SG&A and categories not performing well.

A: Matthew Bilunas discussed SG&A leverage from sales, Corie Barry and Matthew Bilunas talked about appliance and TV categories needing model shifts and investments.

Q: Christopher Horvers with JPMorgan asked about marketplace and ads margin, holiday planning.

A: Matthew Bilunas and Corie Barry discussed margin benefits, holiday promotional calendar and sales shape.

Q: Anthony Chukumba with Loop Capital Markets asked about market share and Switch 2 allocations.

A: Corie Barry said improved share position, Jason Bonfig talked about happy with Switch 2 allocations and gaming segment growth