Best Buy Reports Q1 Fiscal 2026 Revenue of $8.77 Billion, Net Earnings Decline

Best Buy Co., Inc. reported its financial results for the first quarter of fiscal 2026, revealing a revenue of $8.77 billion, a slight decrease of 0.9% compared to $8.85 billion in the same period last year. The company's net earnings also fell to $202 million, down from $246 million, resulting in diluted earnings per share of $0.95, compared to $1.13 in the prior year. The decline in revenue and profitability was attributed to a challenging retail environment, characterized by inflationary pressures and a decrease in consumer spending in certain categories.

The company's restructuring efforts, particularly in its Best Buy Health segment, led to restructuring charges of $109 million in the current quarter, a significant increase from $15 million in the same quarter last year. This initiative aims to optimize operations and improve profitability, reflecting the company's strategic focus on enhancing its health business while also addressing tariff-related challenges. The restructuring charges contributed to a decrease in operating income, which fell to $219 million from $312 million year-over-year.

In terms of operational metrics, Best Buy's domestic segment generated $8.13 billion in revenue, down from $8.20 billion, with comparable sales declining by 0.7%. Notably, the computing and mobile phone categories saw growth, while home theater and appliance sales experienced declines. The international segment also faced challenges, with revenue decreasing to $640 million from $644 million, primarily due to unfavorable foreign exchange rates and a decline in gaming sales. The total number of stores decreased slightly to 1,108 from 1,117, as the company continues to evaluate its store footprint.

Best Buy's cash and cash equivalents stood at $1.15 billion as of May 3, 2025, down from $1.58 billion at the end of the previous quarter. The decrease was primarily due to timing in inventory purchases and increased share repurchases, which totaled $100 million in the current quarter, up from $52 million a year ago. The company maintains a strong liquidity position, supported by a $1.25 billion revolving credit facility established in April 2025, which has no outstanding borrowings as of the reporting date.

Looking ahead, Best Buy anticipates continued challenges in the retail environment, particularly with inflation and changing consumer preferences. The company is focused on executing its restructuring initiatives and optimizing its product offerings to enhance profitability. Management remains cautious about the impact of macroeconomic factors on future performance but is committed to leveraging its strengths in technology and customer service to navigate the evolving market landscape.