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The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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F500-2023-094-Best Buy

The electronics retailer with more than 900 stores nationwide struggled through a difficult year, falling 26 spots on this year’s Fortune 500 list. 
<ul> 
 	<li>Revenue fell 11% to $46 billion and profit fell 42% to $1.4 billion.</li> 
 	<li>The company is predicting that customers will soon repair or upgrade all the home devices they bought during the pandemic, leading to an uptick in revenue.</li> 
 	<li>Best Buy laid off hundreds of in-store employees in April 2023 in what the company called a rethinking of its retail experience as more shopping moves online.</li> 
 	<li>The company had 90,000 workers in the U.S. and Canada as of January 2023, down from nearly 125,000 workers in early 2020.</li> 
 	<li>CEO Corie Barry is one of 52 female CEOs leading Fortune 500 companies.</li> 
</ul>

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

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Modern Boards 2022 Best Buy

Best Buy’s board includes three former CEOs and four active CEOs, including its own chief, Corie Barry, as well as David Kenny (Nielsen), Steve Rendle (VF Corp.), and Eugene Woods (Atrium Health). Best Buy scored high on board size, its CEO succession plan, and senior independent nonexecutive director representation. 
 
Other notable names among its directors include Karen McLoughlin, former CFO of Cognizant Technology Solutions, and Mario Marte, current CFO of Chewy.  
 
Best Buy reported sales of $51.7 billion in the fiscal year ended January 2022, registering double-digit sales growth even as it grappled with the COVID pandemic, inflation, and supply-chain shortages.

Fortune Modern Board 25

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-068-Best Buy

Best Buy was able to post record-high revenues and earnings in 2021, though the road ahead for the consumer electronics retailer isn’t necessarily smooth. Fourth-quarter 2021 sales declined year over year in the U.S. as supply-chain issues and the continuing decline in popularity of in-person shopping dogged the company. More than 20 brick-and-mortar Best Buy stores closed last year, and more are expected to shut down in 2022. Still, Best Buy has had success in expanding its e-commerce and online shopping offerings; nearly 40% of the company’s domestic revenue now comes from e-commerce.

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Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-238-Best Buy

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;As screen time soared in 2020, so did Best Buy. Revenue at the electronics retailer rose 8.3% to $47 billion in 2020 compared with the prior year—enough to push the company up nine spots on the Fortune 500 list this year. Profit, meanwhile, climbed a hefty 16.7%. The good news came, in part, from the work-from-home revolution, as newly remote workers stocked up on home office equipment and other technology. But it's not rosy for everyone at Best Buy. The retailer expects online shopping to account for 40% of sales next year compared to just 19% two years earlier—which prompted the company to announce store closures and 5,000 layoffs in early 2021. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">As screen time soared in 2020, so did Best Buy. Revenue at the electronics retailer rose 8.3% to $47 billion in 2020 compared with the prior year—enough to push the company up 37 spots on the Global 500 list this year. Profit, meanwhile, climbed a hefty 16.7%. The good news came, in part, from the work-from-home revolution, as newly remote workers stocked up on home office equipment and other technology. But it's not rosy for everyone at Best Buy. The retailer expects online shopping to account for 40% of sales next year compared to just 19% two years earlier—which prompted the company to announce store closures and 5,000 layoffs in early 2021.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-66-Best Buy

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;As screen time soared in 2020, so did Best Buy. Revenue at the electronics retailer rose 8.3% to $47 billion in 2020 compared with the prior year—enough to push the company up nine spots on the Fortune 500 list this year. Profit, meanwhile, climbed a hefty 16.7%. The good news came, in part, from the work-from-home revolution, as newly remote workers stocked up on home office equipment and other technology. But it's not rosy for everyone at Best Buy. The retailer expects online shopping to account for 40% of sales next year compared to just 19% two years earlier—which prompted the company to announce store closures and 5,000 layoffs in early 2021. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">As screen time soared in 2020, so did Best Buy. Revenue at the electronics retailer rose 8.3% to $47 billion in 2020 compared with the prior year—enough to push the company up nine spots on the Fortune 500 list this year. Profit, meanwhile, climbed a hefty 16.7%. The good news came, in part, from the work-from-home revolution, as newly remote workers stocked up on home office equipment and other technology. But it's not rosy for everyone at Best Buy. The retailer expects online shopping to account for 40% of sales next year compared to just 19% two years earlier—which prompted the company to announce store closures and 5,000 layoffs in early 2021.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-275-Best Buy

Corie Barry, who became CEO of the retailer in June 2019, oversaw a rise in online sales during her first year in the job: Digital orders accounted for nearly 20% of the company’s $43.6 billion in revenue last year. But after frenetic consumer demand in March—as the newly self-isolated stocked up on laptops, refrigerators, and devices that could be used for remote learning—Best Buy, like most retailers, began feeling the sting of the pandemic. The 54-year-old chain in April furloughed 51,000 of its 125,000 employees, including nearly all part-time workers.

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F500-2020-075-Best-Buy

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The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Best Buy is an electronics products retailer that also offers delivery, installation, technical support, repair, and warranty services. Its portfolio includes computers, mobile phones, smart watches, televisions, entertainment products, sporting goods, and appliances such as refrigerators and dishwashers.

Q2 2027

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Q4 2025

Q3 2025

Best Buy (BBY): Company Profile, Stock Price, News, Rankings

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Ladies and gentlemen, thank you for standing by. Welcome to Best Buy's Fourth Quarter Fiscal twenty twenty five Earnings Conference Call. As a reminder, this call is being recorded for playback and will be available by approximately 1PM Eastern Time today. If you need assistance on the call at any time, I will now turn the conference over to Molly O'Brien, Head of Investor Relations.

Thank you, and good morning, everyone. Joining me on the call today are Corey Berry, our CEO Matt Balunas, our CFO and Jason Bonfig, our Senior Executive Vice President of Customer Offering and Fulfillment. During the call today, we will be discussing both GAAP and non GAAP financial measures. A reconciliation of these non GAAP financial measures to the most directly comparable GAAP financial measures and an explanation of why these non GAAP financial measures are useful can be found in this morning's earnings release, which is available on our website investors.bestbuy.com. Beginning this quarter, we have renamed all of our non GAAP financial measures to adjusted financial measures.

For example, non GAAP SG and A has been renamed to adjusted SG and A. The methodology for calculating these measures remains unchanged. And therefore, any previously reported non GAAP financial measures that are renamed to corresponding adjusted financial measures remain unchanged. In addition, I want to remind you that fiscal twenty twenty five had fifty two weeks compared to fifty three weeks in fiscal twenty twenty four. We estimate the impact of the extra week in Q4 fiscal twenty twenty four added approximately $735,000,000 in revenue, approximately 15 basis points of adjusted operating income rate and approximately $0.3 of adjusted diluted EPS to the full year results.

Comparable sales for the fourteen week Q4 fiscal twenty twenty four and fifty three week fiscal twenty twenty four exclude the impact of the extra week. Finally, some of the statements we will make today are considered forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may address the financial condition, business initiatives, growth plans, investments and expected performance of the company and are subject to risks and uncertainties that could cause actual results to differ materially from such forward looking statements. Please refer to the company's current earnings release and our most recent Form 10 K and subsequent Form 10 Qs for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward looking statements to reflect events or circumstances that may arise after the date of this call.

Good morning, everyone, and thank you for joining us. I am pleased to report both better than expected sales and earnings for the fourth quarter. We drove positive enterprise comparable sales growth of 0.5%. On revenue of almost $14,000,000,000 we delivered an adjusted operating income rate of 4.9% and adjusted earnings per share of 2.58 As we entered fiscal twenty twenty five, we were operating in an uneven environment and expected there would be industry pressure. Our fiscal twenty twenty five strategy was to focus on sharpening our customer experiences and industry positioning, while maintaining, if not expanding, our operating income rate on a fifty two week basis.

And with today's results, on a fifty two week basis, we are reporting 20 basis points of annual adjusted operating income rate expansion on a 2.3% comparable sales decline, demonstrating our ability to preserve profitability in a softer sales environment. The Q4 holiday promotional environment was in line with our expectations going into the quarter. As we have seen for the past several quarters, customers were deal focused and attracted to more predictable sales moments. We were pleased to see strong customer response to our doorbusters and earlier Black Friday sales. This gave us a running start to the quarter and the strong November comparable sales in a holiday season with fewer shopping days between Black Friday and Christmas Day.

Our digital sales were almost 40% of total domestic sales this Q4, a slightly higher mix than last year. We saw sales growth across digital assets, including the Best Buy app, which hit the number one ranked shopping app position on the Apple App Store on Black Friday this year and saw almost 20% traffic growth. We had very competitive fulfillment options offering our online customers on average a 10% faster promise for delivery this year. In addition, 45% of our online revenue was picked up in our stores by our customers during the quarter, showing the value customers put on the convenience of our stores. From a product category perspective, we drove comparable sales growth in computing, tablets and services.

This growth was partially offset by declines in appliances, home theater and gaming. We delivered better than expected domestic comparable sales growth of 9% in the combined computing and tablet categories. Laptop sales growth specifically increased to 10% versus 7% growth in Q3. Improved sales performances in headphones and in TVs within the broader home theater category also added to better sales results compared to the first three quarters of the year. As I step back, there are several factors that contributed to our results and set us up well for success in fiscal twenty twenty six.

Our stores reset, enhanced vendor experiences and labor enhancements contributed to material year over year improvement in our domestic relationship Net Promoter Score, which tracks consumers' likelihood to recommend Best Buy. The investments we made in both digital and store experiences and associate training helped us optimize the computing replacement and upgrade cycle to drive sales growth and share in the category. In our digital business, our focus on personalization and speed resulted in app engagement and sales growth. Our investment in marketing and the introduction of our new branding drove traffic and positive lift to brand perception metrics. We successfully tested new targeted promotional strategies that delivered higher engagement across all tiers of our My Best Buy membership.

Our prudent and balanced approach to expenses allowed us to invest strategically and our ongoing efforts and investments in onboarding, training and our commitment to creating a stable and engaging environment for our employees contributed to our lowest employee turnover metrics in six years and higher engagement scores sequentially and year over year. We are encouraged by and proud of our execution and results and I'm beyond grateful for the passion and hard work our team members across the company demonstrate each and every day. As we enter fiscal twenty twenty six, we are excited to build on the momentum from this past year. Our strategy is to continue to strengthen our position in retail as a leading omnichannel destination for technology, expanding our operating income rates, while at the same time building and scaling new profit streams that we believe will drive robust returns in the future. Therefore, our fiscal twenty twenty six priorities are as follows: one, drive omni channel experience improvements that resonate with our customers two, launch and scale incremental profit streams, including Best Buy Marketplace and Best Buy Ads and three, drive operational effectiveness and efficiency to fund strategic investments and offset pressures.

Of course, these priorities are intertwined and work together as a great customer experience drives the level of opportunity to generate incremental profit streams. Before providing more detail on these priorities, I'll share some insights on the assumptions driving our sales expectations. We believe the consumer will remain resilient, but is still dealing with high inflation that is driving expenses up across their lives, making them value focused and thoughtful about big ticket purchases. We also still see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation. After stabilizing through fiscal twenty twenty five, we expect The U.

S. CE industry to be flattish to slightly up this year. From a category perspective, we expect continued sales growth in computing and improved sales trends across multiple other categories. This leads to our comparable sales guide in the range of flat to 2% growth for the year, with growth weighted more in the second half of the year based on the timing of product launches and initiatives. We expect growth in computing, including tablets, to continue to be driven by customer need to replace and upgrade products.

We believe this will be helped by both the end of Windows 10 product support in October and ongoing innovation in the form of gradual improvement in AI use cases and release of new AI features. Beyond computing, we expect other categories to show more stabilization and improved comp sales trends, including home theater, mobile phones and major appliances. Against this backdrop, I need to pause a moment to address the topic of tariffs. International trade is critically important to our business and industry. The consumer electronics supply chain is highly global, technical and complex.

China and Mexico remain the number one and number two sources for products we sell respectively. While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely. The fiscal twenty twenty six guidance we provided this morning does not include the impact of the recently enacted tariffs. This is because it is a highly dynamic situation with uncertainty about the duration, timing, amount and countries involved in addition to the potential action of others in the industry as well as the potential reaction of American consumers. That being said, we believe it is helpful to provide some level of context.

Based on our early analysis, if the China tariffs that went into effect on February 4 remain at the 10% level for the full year, we believe they would have a negative impact in the ballpark of one point of comparable sales. This would mainly impact quarters two through four. I want to stress that our deeply tenured and talented teams are experienced at operating in volatile conditions and this is also a situation where our partnerships with vendors are extremely valuable. We intend to execute the strategic plan we set for this year while navigating the tariff environment. Now, I would like to provide more details on this plan and our fiscal twenty twenty six strategic priorities.

As I mentioned, our first priority is to drive omni channel experience improvements that resonate with our customers. I will start with our digital experiences where one third of our domestic revenue is transacted and 60% of our purchasers visit at some point during their shopping journey. Our first focus for the year is to meaningfully improve our search and discover capability to make it even easier for our customers to find what they want and need. Therefore, we will leverage AI to launch an innovative new search experience across .com, SmallView and the app. We will also build on the foundation we established last year as it relates to personalization using AI to make the personalization smarter to drive both engagement and conversion.

The app is our preferred shopping experience for both our free and paid My Best Buy members and the personalized home screen was served to members on over 100,000,000 sessions in the fourth quarter, driving measurable improvements in engagement. This spring, we will be introducing Best Buy storefronts that will allow influencers and creators to build their own branded digital storefronts on bestbuy.com, which we expect to drive increased traffic, engagement and sales. Additionally, we will continue to integrate enhanced data and expand video content that improves the customer experience across the shopping journey. Our stores are incredibly important for both our customers and our vendors. Customers know they can visit a Best Buy store to see and demo product or talk to a knowledgeable sales associate in ways they can't anywhere else.

Overall, our plan for our physical stores is similar to last year. We will prioritize merchandising and store health and appearance updates over large scale remodels. In doing so, we continue to leverage the valuable insights we've gained from testing and deploying unique solutions within our store portfolio in the past few years. For example, our recess in monitors and digital imaging earlier in the year contributed to sales growth for those categories in the holiday quarter. Throughout the year, we expect to drive shopping experience updates across the chain, including growing vendor paths in home theater, expanding tablet and virtual reality departments and enhancing experiences for expected iconic gaming launches.

We will also continue the rollout we began last year of dedicated space to showcase new and emerging tech after seeing positive results for many participating vendors. Many of these planned updates are in partnership with our vendors. They are increasingly investing in our sales floors, both physically and in specialized labor, helping us create unique and engaging merchandising for our customers. For example, last year, we repositioned computing to the center of several stores and implemented enhanced Microsoft and Apple experiences, which are already showing promising results. We plan to implement these updates in more stores later this year.

We will continue our disciplined annual approach to closing or relocating less profitable locations. Last year in The U. S, we closed 12 traditional big box stores and opened two new stores. This year, we expect to close roughly five to 10 stores and open a few new smaller format stores. From a labor perspective, in fiscal twenty twenty six, we will focus on enhancements and optimization, building on the more material changes we have made in the last few years.

Overall, we were pleased with our decision to add dedicated labor focused on computing, home theater and major appliances in roughly three fifty stores. We'll keep refining to boost sales proficiency and customer experience and expand this model to more locations this year. To continue the commitment to driving product knowledge, merchandising excellence and customer engagement, we plan to bring these dedicated associates together for an intensive vendor supported in person training and certification program in the spring. In our services business, we expect to update our customer offers for home theater delivery and installation. These new service offers will be simplified from the current state and should make our installation services both more attractive to a wider base of customers and easier to sell, clearly highlighting our most differentiated experiences.

Additionally, I will highlight the valuable role that our Geek Squad agents play in times of new technology. For example, they help customers understand what is unique about CoPilot Plus AI PCs or why they would want to upgrade their computers as we approach the upcoming Windows 10 upgrade cycle. Our second strategic priority for fiscal twenty twenty six is focused on incremental profitability stream opportunities. As we mentioned in our last earnings call, we are targeting a mid year launch for our new U. S.

Best Buy marketplace. We believe that as the trusted leader in CE, we have an opportunity to leverage our positioning and assets to build a differentiated digital marketplace platform. This will allow us to bring our customers access to much more expansive assortment and new categories without needing to own the inventory. In addition, sellers and advertisers will have an additional avenue to increase their reach and build their brands leveraging our qualified traffic. We will phase in capabilities over time.

For example, we plan to facilitate product returns for our customers at Best Buy stores when we launch the marketplace. We expect to add capabilities such as Fulfillment as a Service for sellers in a later phase. It is still early in the process and we are pleased with the strong interest from sellers and believe it indicates a promising launch. All potential sellers will go through a vetting process so we can ensure our customers receive the positive experience that they would expect at Best Buy. Our Canada team operates an established growing third party online marketplace and we have leveraged their learnings and expertise as we build out our plans.

Even with start up costs, investments and estimated cannibalization of our first party product revenue, we expect Marketplace to have a positive impact on our operating income rate in fiscal twenty twenty six. Over time, we expect Marketplace to help drive profit dollars and unit share. In addition, it will provide opportunities for Best Buy Ads through new advertisers and increased traffic. We have recently elevated the focus on our Best Buy Ads business and see fiscal twenty twenty six as a pivotal year. We've had a robust retail media network business for a long time in partnership with our vendors.

We are proud of this business we have built, but see opportunity for further growth. Last fall, we brought in a new leader for the business, Lisa Valentino, who brings more than twenty years of media and advertising leadership experience at firms such as Disney, Conde Nast and ESPN. We are currently filling other key leadership roles and plan to open a New York office. In fiscal twenty twenty six, we are investing in capabilities that we believe will unleash growth like competitive market level self-service offerings that allow brands to manage their own advertising buys and new ad products that will expand inventory and customer reach. We also expect to drive results through agency relationships and the new marketplace I just discussed.

In fact, we have just signed our first joint business partnership with one of the largest global holding companies. We expect agency partnerships to result in new advertisers and revenue growth over time, leveraging our data targeting, advanced and innovative beta opportunities in areas like commerce, sponsorships and in store experiences. I will add that our membership program plays multiple roles in our business, not only providing unique value to our members, but also serving as a source of growth for our rich first party data that helps fuel Best Buy ads. We have approximately 100,000,000 members across three tiers: free My Best Buy membership, Best Buy plus paid membership and Best Buy total membership. We ended the year with nearly 8,000,000 paid members, up from 7,000,000 last year.

We expect growth in ad collections to contribute to gross profit rate improvement in fiscal twenty twenty six. From an operating income rate perspective, we expect more of a neutral impact due to the investments we are making. We believe the actions we are taking in fiscal twenty twenty six position us for future growth and rate expansion over the next number of years. Our third strategic priority for fiscal twenty twenty six is a consistent one. It is to drive operational effectiveness and efficiency.

We have a long standing commitment to identifying cost reductions and driving efficiencies to help fund investment capacity for new and existing initiatives and offset inflationary pressures in our business. In our procurement operations, we expect to complete the multi year deployment of our full source to pay technology capability. This will give us expanded transparency into billions of dollars of goods not for resale spend. In combination with the enhanced automation of our purchasing process, this paves the way for continuous cost optimization opportunities. As we have discussed previously, we have been improving our customer service experience and operational efficiency by modernizing our IVR phone system with AI powered solutions.

These advancements intelligently route customers to the right agent, reducing friction and improving resolution speed. Since implementing AI powered routing logic, we have achieved a 300 basis point reduction in transfer rates, demonstrating improved accuracy and directing customer inquiries. We also leverage technology to enable seamless self-service options for key functions such as price matching, order status inquiries and membership management. As a result, self-service adoption has doubled with nearly 50% of customers managing their memberships via phone without agent assistance. This shift not only improves customer satisfaction by offering faster more convenient solutions, but also optimizes resource allocation within our support teams going forward.

In addition, during the holiday season, we were able to leverage text analytics with 100% of our customer service agent interactions, creating a real time performance dashboard that highlighted top contact drivers and call volume trends and provided daily alerts for anomalies. This allowed us to quickly identify and resolve issues that were affecting multiple customers. In Q1, we will expand this program to chat interactions. Last year, we established a digital and technology hub with a partner in Bangalore, India. This year, we will expand the scope of work being performed by our India resources, leveraging more economical access to talent and skills.

I'd like to take a moment to talk about Best Buy Health. During the fourth quarter, we recorded an impairment charge to reflect the downward revisions in our longer term projections. We still believe in the fundamental strategy of leveraging technology to enable care at home and believe it will be important to the future of healthcare, but the market is not scaling as fast as we originally forecasted. We will continue actions intended to maximize the value and improve the profitability of the business. In summary, we are pleased with our execution and the momentum we built in fiscal twenty twenty five.

We are excited to build on that momentum to bring our fiscal twenty twenty six strategy to life while we continue to navigate uncertain circumstances. We often just that we have the luxury of competing with the biggest retailers in the world. Even so, we continue to thrive. It is because we remain committed to our mission to enrich life through technology. We are the trusted source for the latest and greatest new tech as well as a broad range of assortment, unique in store and digital experiences and the expert services to help our customers.

We are also a true partner to our vendors, often working with them from early in the product development cycle all the way to launching products on our sales floor. And with that, I will now turn the call over to Matt.

Good morning. Before I talk about our fourth quarter results versus last year, let me start with how the quarter performed versus the expectations we shared with you last quarter. On enterprise revenue of $13,900,000,000 our adjusted operating income rate was 4.9%, both of which exceeded our expectations. Our overall gross profit rate was better than expected, which was primarily due to the favorable product margins, whereas adjusted SG and A dollars were unfavorable to our outlook entering the quarter, which was primarily driven by higher incentive compensation. I will now talk about our fourth quarter results versus last year.

As Molly stated, this year's fourth quarter included thirteen weeks compared to fourteen weeks last year. We estimate the extra week was approximately $735,000,000 in revenue and $0.3 of adjusted diluted earnings per share and provided a benefit of approximately 40 basis points to last year's fourth quarter adjusted operating income rate. Enterprise revenue increased 0.5% on a comparable basis. Our adjusted operating income rate of 4.9% declined 10 basis points compared to last year, and our adjusted diluted earnings per share decreased 5% to 2.58 By month, our enterprise comparable sales were up approximately 4% in November before declining 2% in December and ending January slightly up. In our domestic segment, comparable sales increased 0.2% and revenue decreased 5.2% to $12,700,000,000 The revenue decrease was primarily driven by the lapping of last year's extra week.

International comparable sales increased 3.8% and revenue decreased 0.2% versus last year to $1,200,000,000 The revenue decrease was largely due to the extra week last year and a negative foreign currency impact of approximately 500 basis points, which were partially offset by revenue from Best Buy Express locations that have opened during fiscal twenty twenty five. Our domestic gross profit rate increased 50 basis points to 20.9%. The higher gross profit rate was primarily driven by improvement within the services category, which includes our membership offerings. This was partially offset by lower credit card profit sharing revenue. Our international gross profit rate increased 40 basis points to 21.4%.

The higher gross profit rate was primarily due to favorable supply chain expense. Moving to SG and A, where our domestic adjusted SG and A decreased $30,000,000 The decrease was primarily due to the lapping of last year's extra week, which was partially offset by higher incentive compensation and advertising expense. As Corey mentioned, we recorded a goodwill impairment related to Best Buy Health. This totaled $475,000,000 and is excluded from our adjusted earnings. During fiscal twenty twenty five, our total capital expenditures were $7.00 $6,000,000 versus $795,000,000 in fiscal twenty twenty four.

The year over year decline was driven by a reduction in both store related investments and technology, which was partially offset by increased expenditures in Canada. During fiscal twenty twenty five, we returned $1,300,000,000 to shareholders through share repurchases and dividends. We remain committed to being a premium dividend payer and this morning announced that we are increasing our quarterly dividend to $0.95 per share, which is a 1% increase. This increase represents the twelfth straight year we have raised our regular quarterly dividend. Moving on to our full year fiscal twenty twenty six financial guidance, which as Corey mentioned, excludes the impacts of recent tariffs and is the following: Enterprise revenue in the range of $41,400,000,000 to $42,200,000,000 Enterprise comparable sales of flat to up 2% Enterprise adjusted operating income rate in the range of 4.2% to 4.4% and adjusted effective income tax rate of approximately 25% adjusted diluted earnings per share of $6.2 to $6.6 capital expenditures of approximately $700,000,000 to $750,000,000 and lastly, we expect to spend approximately $300,000,000 on share repurchases with the purchases weighted more heavily to the second half of the year.

Next, I will cover some of the key working assumptions that support our guidance. Earlier, Corey provided context on our fiscal twenty twenty six top line assumptions, so let me spend more time on the profitability outlook. We expect our gross profit rate to be in a range of flat to up approximately 20 basis points compared to prior year. Most of the primary components of the gross profit are planned very similar to fiscal 'twenty five from a rate perspective. Within our gross profit rate outlook, there are a few items that I would like to highlight.

We expect growth from Best Buy Ads and the rollout of our U. S. Marketplace to benefit our gross profit rate. Product margin rates are expected to be flat to slightly down when compared to fiscal 'twenty five. We expect our services category, including membership, to have a neutral impact to our gross profit rate compared to the prior year.

After being a pressure in fiscal 'twenty five, we expect the profit share on our credit card arrangement to have a neutral impact in fiscal twenty twenty six. Now moving to our adjusted SG and A expectations. As a percentage of revenue, we expect our adjusted SG and A to be approximately flat to fiscal twenty twenty five, which includes the following puts and takes. SG and A is planned to increase in support of our Best Buy ads and marketplace initiatives, which includes advertising, technology and employee compensation expense. We expect higher incentive compensation as we reset our performance targets for the new year with the high end of our guidance assuming an increase of $45,000,000 compared to fiscal twenty twenty five.

Partially offsetting the previous items are expected benefits from ongoing efficiencies and effectiveness work streams, including in Best Buy Health. So our payroll expense and items like credit card processing fees are expected to increase at the high end of our revenue guidance with minimal impacts from a rate perspective. Lastly, the low end of our guidance reflects our plans to further reduce our variable expenses, including incentive compensation to align with the sales trends. Before I close, let me share a couple of comments specific to the first quarter. We expect our first quarter comparable sales to be slightly down versus last year.

We expect our Q1 adjusted operating income rate to be approximately 3.4%, which is 40 basis points lower than last year's first quarter. We expect our gross profit rate to be flat to up 20 basis points, which aligns with our guide for the full year. I will now turn the call over to the operators for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Christopher Horvers of JPMorgan. Please go ahead.

Thanks and good morning. Let me be the first to ask the first tariff question. The one point headwind on the 10% tariff from China, is that assuming that you raise price and essentially unit elasticity offsets that? So can you go into that a little bit? And then given the range of guidance, you're saying flat to 2%, it looks like every comp point is $0.2 So is it fair to assume that one point headwind is equivalent to a $0.2 EPS headwind?

Sure. Let me start and Corey can jump in here. I think just broadly first, let me just give some context to the estimate. We didn't include our guide because it's a very highly dynamic situation with a lot of uncertainty about the duration, the timing, the amount, the country is involved, the potential actions of the industry and reactions by the American consumer. That being said, we thought it would be helpful to provide some context based on our early analysis.

And what we're estimating is the 10% that we went in on February 4 with China. And again, we're ballparking that at about a negative one point of negative comparable sales impact. We're assuming in this estimation that a material portion of the costs are passed on to us by the vendors and then either that's either directly broken out or blended in with the higher COGS or through some level of promotional positioning. Of course, we prefer not to raise prices, but because of the higher COGS, we need to enact some price increases and that is going to vary based on product categories, SKUs, competitive environment and other factors. The 1% impact is a combination of unit decreases and a slight level of ASP increase based on the price the prices going up.

The giant wild card here obviously is how the consumers are going to react to the price increases in light of a lot of price increases potentially throughout the year and a general consumer confidence that is showing a little signs of weakness at the moment. I think it's not necessarily fair to take what we're expecting from a profit perspective is really just a normal flow through at this point, but that would be net of any sort of other mitigants we would normally do if business starts to go downward. And as it relates to the comp increase in 20 basis points, I don't know if these are just extremely linear. Part of what we're trying to do this year on top of navigating the tariff situation is also investing in our future, investing in initiatives. And so we are getting leverage with some of that revenue growth and we expect the initiatives that we're driving this year to help expand rate in the future on top of actually also contributing to operating income dollars this year as well.

Chris, I would just give like two more bits of context here. One, I think I need to state the obvious. We've never seen this kind of breadth of tariffs and this of course impacts the whole industry. So it's not just a Best Buy question, it is a broad industry question. And I say that because that makes the estimation of the impact all the harder, especially when you're in the guts of a replacement and upgrade cycle where people really need this stuff.

So it's difficult for us to understand elasticities perfectly because you don't have anything predictive in our history that looks or feels quite like this. The second thing I would say then to that same point is this isn't a perfect linear conversation. So I know it's tempting to say, well, if the tariffs go from 10% to 20% in China, do I just double? It's not going to be a linear point of view on how this impacts, particularly at the end of the day, the consumer who, of course, given how the tariffs are structured right now will have impacts across many of the things that they are purchasing. So I think we try to give you our best take based on what we can see today, but to just point out that the difficulties in trying to assess the situation given how unique it is.

Yes. I appreciate that. I appreciate those challenges, especially with the timing of everything and when we're having this call today. And that you anticipated my second question, which was the linearity of if 10 went to 20, maybe going to the other side, which is Mexico, we estimated maybe Mexico was 15% to 20% of sourcing. My understanding is a chunk of that is your private label TV program.

So you can talk about how you're thinking about the Mexico exposure and is there more of a bigger headwind if Mexico goes into a place into place because there's not a with that private label, there's not necessarily a shared burden with the vendor base? Thank you.

I'll start with your estimations in terms of size are right in the ballpark. We're probably about 20% sourced from Mexico in total across the whole vendor profile. So I want to make sure I reinforce that that is appropriate. Jason, maybe you can comment on the exclusive brands side of things.

Yes. Mexico does impact not only our exclusive brands business, but also a large percentage of the TV business, basically large screen TVs in particular as well as appliances.

Thank you. Thank you. Your next question comes from the line of Brian Nagel of Oppenheimer. Please go ahead.

Hi, good morning. So I too I want to follow on Chris's comments about Chris's questions about tariffs. I apologize, because I know this will be a big topic. So recognizing it's extraordinarily early. We're literally getting this news in real time as you are as well.

But Best Buy has proven over time an extraordinarily nimble operator. To what extent is there flexibility in your supply chain that these tariffs stick that you are able to shift some of your sourcing either on direct or as you work with your vendors?

So I'm biased, Brian, but I do want to stress that we have an incredibly deeply tenured team here. And to your point, this is a team that has some life experience in navigating this kind of situation. Secondarily, we are deeply grateful to our vendor partners to also, have been willing to continue to be willing to come to the table and try and work through this with us. There are quite a few actions you can imagine that we are taking on. So first, we are in constant communication with our vendors, making sure that we understand all the way down to the SKU level what some of the potential impacts might be.

Therefore, we can evaluate some of those near term inventory implications and where we might want to move our assortment to one or a different SKU depending on what the implications are. Two, we're reviewing and adjusting our supply chain and sourcing. Obviously, as a reminder, we said it in the call, we only direct import 2% to 3% of our COGS. And we had already diversified a lot of our exclusive brands manufacturing. So we will continue to look at options for that back to the prior question.

But again, it's not a quick move in any of those cases and we had done a lot of the work to try to diversify those already. We are continuing as we told you to analyze and model the impacts to pricing. That is kind of the last thing that we want to adjust. We, of course, want to make sure that our prices are as competitive as possible. But across the industry, this is going to be an issue.

It will impact all parts of the business. We are evaluating the implications for consumer demand because this is bigger than let's just take a step back even if you think about the Q1 guide. This is bigger than just a discussion about tariffs. It's just kind of a volatile environment for the consumer. And I think you can see that reflected in some of the consumer confidence numbers we're seeing right now.

And so we're watching that and trying to understand how best do we meet consumer needs in that environment. We of course are engaging with any policymakers to ensure they just have our point of view on this really complex set of supply chain ecosystem. And then finally, we're, of course, leveraging some of our industry partners that's CTA or the National Retail Federation just make sure that we're kind of bringing the holistic story together across not just consumer electronics retail, but retail in general.

That's very helpful, Corey. I appreciate it. My follow-up question, I guess, it's more of just a numbers question, but you've done a nice job. You pointed this out Matt, you pointed this out in your prepared comments that here you are leveraging expenses and this is called calendar 24 with still somewhat weak sales. The question I have is, as we look forward, you're assuming that or that the sales backdrop or Best Buy is starting to solidify here.

You're starting to see maybe a better trajectory. How should we think about the leverage going forward? I mean, how much is the base in the model set or is there going to be some type of expense to come back in as sales presumably continue to improve?

Yes. Thanks for the second question there. I do expect that as we continue to grow sales that we would at a core operating unit get leverage on those sales. I think what's sometimes hard to see is just the fact that in order for us to also improve rate in the future, we need to continue to invest in things that will help bolster the profit, which are things like ads and things like marketplace. And so this year, as we guide zero to plus two comps without tariffs, we are also guiding at the high end expansion of operating income rate.

And within that, you do have core leverage on the sales and then you have some investments going into things like ads in marketplace that has SG and A growing at a similar pace of sales. But that is an OI rate, an OI dollar contribution in this year and what we would hope to future years. So in the future, we would expect to be able to as sales grow to get some a little bit of leverage and also be able to see expansion of rates supported by other things like ads in marketplace and any other initiatives that we would engage in.

Cool. I appreciate all the color. Thank you.

Your next question comes from the line of Jonathan Matushevsky of Jefferies. Please go ahead.

Great. Good morning and thanks for taking my questions. Corey, could you elaborate on your learnings from the success you've had with the marketplace in Canada over the past several years? And just kind of comment on the elements you're looking to replicate in The U. S.

And any areas you may be looking to change? Thanks so

Yes. This is one of those places where we have a distinct advantage in that at least some portion of the company has been dealing with marketplace. In Canada, that marketplace has been historically geared a little bit more towards some of the refurb and rebuild side of the equation. We have actually had a lot of that same product here in The U.

S. It hasn't been marketplace. It's been our own refurbished product. So we have some experience on that side of things. I think what we've learned from Canada is that there is a demand to go deeper into the assortments.

And that's not just the Canada question. We can see that in customers who are searching our website and looking for a broader selection or looking for a broader quantity of products and we just don't have them there for them. And what Canada has shown us distinctly is that you can't by offering this deeper selection of products, you can capture latent demand that you hadn't been able to before because you were so worried about having all of that inventory on hand. I think in The U. S, One of the things that we will do that slightly different is we'll probably offer even more new products and we'll have multiple versions of the same SKU that are going to be available in our marketplace.

And that's a little bit different than what we've seen in Canada. It's actually a learning that we wish we could implement in Canada and we're actually going to implement in The U. S. First. So we're trading notes back and forth, and I think that's been a really helpful piece of the puzzle in terms of how we have prioritized the experiences that we think will matter most in our marketplace here.

That's really helpful. And I guess just my follow-up question is on the market place. I think in Canada, One out of every four items shipped on Best Buy Canada's website is from three piece sellers. So I guess if you think kind of long term about this initiative, is there any reason why that's not the trajectory for the marketplace in The U. S?

I think we'll see how it goes. What I would say is back to the differences in between Canada and The U. S. Canada has less 1P refurb product. So you had a lot of people going there to get this kind of refurb and value based product.

And that was a big part of the early demand. Their demand has evolved since then. It's now growing more into some of the new space and a little less in the refurb. So we'll see how ours looks different because we will have some of that few overlap and we're going to be geared a lot more toward deeper assortment new product.

But I think it's going to take a little bit

of time to evolve in terms of exactly how that looks in The U. S. But we are bullish on, again, because we can see customer behavior, we are bullish on having this deeper assortment available to our customers.

Your next question comes from the line of Michael Lasser of UBS. Please go ahead.

Good morning. Thank you so much for taking my question, Corey and Matt. If the tariffs persist as they went into effect today, how much pricing will be seen across the industry? Is it going to be in the hundreds of basis points, high hundreds of basis points? What do you expect if these tariffs persist the consumer is going to experience and most likely Best Buy will participate in terms of raising prices?

Good morning. I wish I could give you a precise answer that would get down to quantity of basis points. I think it is a very difficult situation to answer precisely because it relies on everything from what will vendors absorb to what will we think about trying to offset to the competitive landscape to your point everyone in the industry facing this all the way to what gets passed on to the consumer. I think it is fair to say and we said it in our prepared remarks that tariffs at this level will result in price increases. I think it is very difficult to say given the backdrop that we're in exactly precisely how big that is.

Okay. And could you give us a little bit more flavor on how you're going to approach pricing? Meaning, if these tariffs that went into effect today are only temporary, Will you act quickly to raise prices out of really necessity? And then if the tariffs go away a month from now, will you roll back prices? Can you give us some sense in your strategy?

And as part of that, if instead of comping as high as 2% this year, like the high end of your guidance translating to $6.60, if you comp down 2%, how should we think about what your earnings is going to look like in that type of scenario? Thank you very much.

So I'll start, and on the pricing side. Again, this isn't as simple as Best Buy decides to raise prices. This is a full value chain that starts with the manufacturing and then works its way all the way through. As we said, we're only the direct importer record on 2% to 3% of what we sell. So this starts much further upstream with our vendor partners who are navigating this environment along with us.

You can imagine we carry on average, let's call it six weeks of supply. So you're not overnight going to see these implications. And that's why even when we talked about the impact, we said it would be much more in quarters two through four because depending on how fast any category turns, these cost increases will slowly work their way into categories and then will also slowly work their way into price. I think our objective in terms of pricing, Michael, will be the same as it has always been. We want to be competitive.

We want to make sure that we have price points across the spectrum for everyone from value seeking to high end premium seeking. And we want to make sure that in a cycle we're in, where people are looking to replace and replenish and in some cases will be almost forced to because we're looking at something like a Windows 10 upgrade. We want to make sure we're there for them across the assortment. That approach to pricing will not change. We're just going to have to navigate in partnership with our vendors how some of the cost profile changes due to the tariffs.

Yes. And to the extent that in your example where our comps were down negative two this year instead of the guide we gave from flat up I can't give you what that exact flow through is, Michael. I think as you've seen from our past, you've seen our ability to navigate a profit dollar and profit rate in light of sales decline. So that I think we will obviously try to mitigate as much as we possibly can. The reason it's really hard to say at this moment, we really don't know too much about the total impact or the duration.

Best Buy (BBY) Q4 2025 Earnings Call Transcript

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