Best Buy Co., Inc. Q4 FY2026 earnings call

Corey mentioned better than expected profitability in Q4 with adjusted operating income rate 5% and adjusted EPS $2.61. Q4 comp sales down 0.8% within guidance. Market share flat. Holiday demand patterns different. Team pivoted in marketing, promotionality, and labor. Achieved positive comps and stabilized share in FY26. Launched and scaled U.S. digital marketplace, grew Best Buy ads. Invested in technology for customer experience. Plan to open 6 new stores, close 2. Focus on omnichannel, scaling ads and marketplace, driving efficiencies. Worked with vendors on store refreshes. Partnered with OpenAI, Google for digital experience. Reassessing Geek Squad services. Marketplace had $300M domestic GMV in Q4, 1100+ sellers. Best Buy ads had ~$900M gross collections in FY26, expect 10% growth in FY27

In Q4, computing had eighth consecutive quarter of positive comparable sales. Mobile phones had fourth consecutive quarter of growth. Gaming revenue grew but at slower rate than previous two quarters. Newer categories like AI glasses, 3D printers, etc. saw strong growth, offset by declines in home theater and appliances. Ads and marketplace initiatives contributed positively to gross profit rate. Domestic revenue decreased 1.1% to $12.6 billion with comparable sales down 0.8%, online revenue $4.9 billion down 2.3% comp. International revenue $1.2 billion up 0.5% due to foreign exchange, but comp sales down 1.3%

Fiscal 27 guidance: revenue $41.2 - $42.1B, comp sales down 1% to up 1%, adjusted operating income rate ~4.3% - 4.4%, adjusted EPS $6.30 - $6.60, cap ex ~$750M, share repurchases ~$300M. Q1 comp sales expected ~1%, adjusted operating income rate ~3.9%

Significantly increased demand for memory components driving cost inflation and supply uncertainty, particularly in computing. Mixed macro environment. Tariff environment challenges. Competitive industry pressures

Q: About product prices increase due to memory pricing and margins in computing categories.

A: Overall guide for gross profit has 30 basis points increase, product margin rates mostly flat, but some categories in computing may have impact.

Q: Big screen TV sales in Q4 and meta/Google Glasses partnerships.

A: TV sales below expectations, but RGB tech in mid-year to drive interest. Meta partnership is phenomenal, AI glasses a growth trend.

Q: Margin flexibility in guidance to compete.

A: Space is competitive, but ads and marketplace help, team will navigate, product rate pressure built in.

Q: Longer-term expectation after FY26.

A: Industry has innovation and replacement behavior, but need to navigate challenges, ASP could mitigate unit declines.

Q: FY1 comp sales acceleration.

A: Q1 comp expected 1%, driven by computing, gaming, mobile phones, TV trends, tax refund spending and phone launch timing.

Q: Tariffs mitigation.

A: Supreme Court ruling lowered tariff rate, team navigating, ASP flat in Q4, work with vendors.

Q: Same-store sales cadence and ASP/unit volumes.

A: Q1 comp ~1%, memory costs starting to impact some categories.

Q: Marketplace and ads contribution to EBIT margin.

A: This year is investment year, but scaling, expected to contribute to operating rate in future.

Q: ASP outlook and vendor support.

A: Focus on multiple price points, vendor-sponsored labor hours grew 20% in H2 last year, promotionality adjusted in computing.

Q: First quarter comp trends and appliance game plan.

A: Q1 comp positive in areas, appliances facing tough environment, focused on vendor labor, delivery speed.

Q: Vendor innovation and pull forward demand.

A: Vendors not slowing innovation, computing and mobile phones have continued demand, no evidence of pull forward