Best Buy (NYSE:BBY) reported fourth-quarter fiscal 2026 results that management said delivered better-than-expected profitability, even as comparable sales declined modestly and holiday demand proved uneven. The company posted revenue of $13.8 billion and an adjusted operating income rate of 5%, with adjusted earnings per share of $2.61, both slightly higher than the prior year.
Quarterly results and holiday demand patterns
Enterprise comparable sales fell 0.8% in the fourth quarter, landing within the company’s guidance range but toward the lower end, according to Chief Financial and Strategy Officer Matt Bilunas. CEO Corie Barry said data sources indicated market share was “at least flat,” attributing the quarter’s results to “slightly softer consumer demand for our industry during the holiday quarter.”
By month, Bilunas said enterprise comparable sales were down about 3% in November, improved to down 0.2% in December, and rose 0.4% in January.
Category performance and customer metrics
Best Buy’s results reflected divergent category trends. Barry said the company delivered its eighth consecutive quarter of positive comparable sales in computing, driven by laptops, desktops, and accessories. Mobile phones posted a fourth straight quarter of growth, supported by expanded partnerships and in-store operating model improvements with large carriers. Gaming revenue grew, though at a slower pace than in the prior two quarters, which management said was expected.
Barry also cited strong growth in “newer and emerging categories,” including AI glasses, 3D printers, collectibles and toys, health rings, and PC gaming handhelds. Those gains were offset by declines in home theater and appliances.
On customer experience, Barry said relationship Net Promoter Score rose materially year over year and was the highest in 11 consecutive quarters. Online fulfillment speeds also improved, with 70% of online purchases delivered within two days during the fourth quarter, which the company said was its fastest fourth-quarter performance on record.
Ads and Marketplace progress
Management highlighted progress in Best Buy Ads and the company’s U.S. digital marketplace, saying both positively contributed to gross profit rate in the fourth quarter. Bilunas said domestic gross profit rate was 20.9%, flat year over year, with benefits from increased advertising collections and marketplace commission growth offset by lower product margin rates due to unfavorable mix and increased promotions.
Barry said the marketplace ramped through the back half of the year and generated approximately $300 million in domestic gross merchandise value in the fourth quarter. The company reported that third-party purchase experiences were consistent with first-party purchases in terms of five-star ratings, and that marketplace return rates remained lower than first-party returns, with more than 80% of returns handled via return-to-store.
As of the end of fiscal 2026, Best Buy said it had enlisted more than 1,100 marketplace sellers, and more than 90% of sellers with an open storefront were generating sales in any given week. Top unit categories in the quarter included mobile phone accessories, computer accessories, movies, and small kitchen appliances.
In Ads, Barry said fiscal 2026 “growth advertising collections” were just over $900 million, up more than 7% year over year, with most collections recorded as an offset to cost of goods sold and a smaller portion recognized in revenue. Best Buy ended fiscal 2026 with 750 advertising partners, nearly double the prior year, aided by marketplace partner participation after the August launch. The company expects advertising collections to grow about 10% in fiscal 2027.
Bilunas said the company expects gross profit rate to improve by about 30 basis points in fiscal 2027, “primarily driven by both Ads business and marketplace growing,” while product margin rates are assumed to be “pretty flat year-over-year” overall.
Fiscal 2027 outlook, memory costs, and investments
For fiscal 2027, Best Buy guided for comparable sales in a range of -1% to +1% and revenue of $41.2 billion to $42.1 billion. Bilunas guided to an adjusted operating income rate of approximately 4.3% to 4.4% and adjusted diluted EPS of $6.30 to $6.60. The company also expects capital expenditures of about $750 million and plans for roughly $300 million in share repurchases, primarily in the fourth quarter.
Management said consumer demand remains value-oriented and responsive to sales events, but customers will spend on higher-priced products when needed or when innovation is compelling. Barry added that the company expects some benefit from tax refunds, concentrated in the first quarter.
Category expectations for fiscal 2027 included continued growth in computing, which management tied to replacement cycles, the end of support for Windows 10, and AI-driven innovation, as well as ongoing growth in mobile phones due to new carrier labor models and system enhancements. The company also expects emerging categories to continue to expand.
A key variable in the outlook is increasing memory component demand, which management said is creating cost inflation and supply uncertainty, particularly in computing. Barry outlined mitigation actions, including pulling inventory forward, extending vendor forecast horizons, ensuring favorable terms, specifying configurations to meet price points, narrowing assortments to improve in-stocks, and educating customers through tools like trade-in, financing, refurbished options, and easy upgrades with Geek Squad. On the guidance range, Barry said the high end assumes higher prices offset by lower units, while the low end assumes broader inventory constraints.
Store strategy, AI commerce partnerships, and capital return
Best Buy reiterated a strategy of strengthening its omni-channel position while scaling new profit streams and driving efficiencies. Barry said the company will expand vendor-supported store experiences and make changes to store layouts in roughly 70 locations, including moving computing to the center of the store and reallocating space to initiatives such as a broader Meta assortment. Best Buy also plans to pilot outlet sections in some stores and bring Yardbird outdoor furniture into certain locations.
Barry said fiscal 2027 will include “new domestic Best Buy store growth for the first time in more than a decade,” with plans to open six new stores, while closing two as leases come up for renewal. The company plans to keep labor flat as a percentage of revenue, and expects vendor-provided labor hours to grow again after increasing 20% in the second half of fiscal 2026.
On digital initiatives, management described partnerships aimed at making Best Buy’s catalog and checkout more accessible through emerging AI shopping experiences, including work with OpenAI, Google’s Universal Commerce Protocol, and an AI-powered commerce platform called Wizard.
Best Buy also increased its quarterly dividend to $0.96 per share, a 1% increase, which Bilunas said marks the 13th consecutive year of regular quarterly dividend increases. The company returned $1.1 billion to shareholders during fiscal 2026 through dividends and share repurchases.
About Best Buy (NYSE:BBY)
Best Buy Co, Inc is a leading North American consumer electronics retailer that sells a broad range of products including computers, mobile phones, televisions and home theater systems, major appliances, smart-home devices, gaming hardware and software, wearables and related accessories. The company operates through a mix of large-format stores, smaller specialty locations and an e-commerce platform, offering national and private-brand merchandise from major consumer-technology manufacturers as well as third-party sellers.
Beyond product retailing, Best Buy provides a suite of services aimed at installation, repair and ongoing technical support.
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