AI Takeaway
Best Buy delivered a solid FY2026 with revenue up 0.4% to $41.7B, net income surging 15.3% to $1.07B, and EPS growing 17.4% to $5.06, driven by disciplined cost management and SG&A reduction despite a slight gross margin compression.
Revenue
$41.69B
++0.39% YoY
EPS (Basic)
$5.06
++17.40% YoY
Gross Margin
22.5%
-0.12% YoY
Operating Income
$1.39B
++10.06% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue grew modestly by 0.4% year-over-year to $41.7B in FY2026 (from $41.5B in FY2025), suggesting the consumer electronics market is stabilizing after a prolonged post-pandemic normalization period. The marginal top-line growth indicates Best Buy is holding market share in a competitive environment.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Operating income jumped 10.1% to $1.39B despite essentially flat revenue, as SG&A expenses declined 0.4% to $7.62B. This demonstrates meaningful operating leverage and management's focus on cost discipline, expanding the operating margin from 3.04% to 3.33%.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Net income rose 15.3% to $1.07B and diluted EPS grew 17.8% to $5.04, significantly outpacing the 0.4% revenue growth. The EPS outperformance relative to net income growth reflects the benefit of ongoing share repurchases reducing the diluted share count.
Source: Source: 10-K Income Statement & Cash Flow Statement (XBRL Financial Data)
2 more insights available
Upgrade to unlockGross margin declined slightly from 22.60% to 22.48% in FY2026, reflecting ongoing pricing pressure in consumer electronics and potential promotional intensity. If competitive dynamics or tariff-related cost increases intensify, Best Buy's thin gross margins could compress further, directly impacting profitability given its high fixed-cost structure.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.61 versus the $2.49 analyst consensus — a +4.8% beat for FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $41.69B | $41.53B | +0.39% |
Cost of Revenue | $32.32B | $32.14B | +0.54% |
Gross Profit | $9.37B | $9.38B | -0.13% |
Operating Income | $1.39B | $1.26B | +10.06% |
Net Income | $1.07B | $927M | +15.32% |
EPS (Basic) | $5.06 | $4.31 | +17.40% |
EPS (Diluted) | $5.04 | $4.28 | +17.76% |
SG&A Expense | $7.62B | $7.65B | -0.37% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $14.67B | $14.78B | -0.76% |
Current Assets | $8.5B | $8.22B | +3.40% |
Current Liabilities | $7.68B | $8.02B | -4.20% |
Stockholders' Equity | $2.96B | $2.81B | +5.56% |
Cash & Equivalents | $1.74B | $1.58B | +10.14% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.96B | $2.1B | -6.48% |
Investing Cash Flow | $-730M | $-704M | -3.69% |
Financing Cash Flow | $-1.08B | $-1.31B | +17.27% |
Dividends Paid | $801M | $807M | -0.74% |
Share Buybacks | $273M | $500M | -45.40% |
D&A | $831M | $866M | -4.04% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 22.5% | 22.6% | -0.12% |
Operating Margin | 3.3% | 3.0% | +0.29% |
Net Margin | 2.6% | — | — |
ROE | 36.1% | — | — |
ROA | 7.3% | — | — |
Current Ratio | $1.107 | — | — |
Best Buy reported FY2026 revenue of $41.7B, up just 0.4% year-over-year, but net income surged 15.3% to $1.07B and diluted EPS grew 17.8% to $5.04. The strong earnings growth relative to flat revenue was driven by a 0.4% reduction in SG&A expenses and improved operating leverage, expanding the operating margin to 3.33%.
Yes, but only marginally — revenue grew 0.4% to $41.7B from $41.5B in FY2025, reflecting a stabilizing consumer electronics market. The modest top-line growth suggests demand for electronics is recovering slowly from post-pandemic normalization, with Best Buy maintaining its market position.
The key takeaway is that Best Buy delivered strong earnings growth despite near-flat revenue, with net income up 15.3% to $1.07B and EPS up 17.4% to $5.06, driven by cost discipline. The company also strengthened its balance sheet, growing cash to $1.74B and improving its current ratio to 1.11, while paying $801M in dividends.
Based on the financial data, key risks include gross margin pressure (gross margin declined to 22.48%), exposure to consumer electronics demand cyclicality given only 0.4% revenue growth, and potential tariff-related cost increases on imported electronics. Additionally, operating cash flow declined 6.5% to $1.96B despite higher net income, signaling potential working capital headwinds.
Best Buy appears financially sound heading into FY2027, with $1.74B in cash (up 10.1%), a current ratio of 1.11, and free cash flow of approximately $1.23B that comfortably covers its $801M dividend. However, the thin gross margin of 22.48% and modest revenue growth of 0.4% highlight the competitive pressures inherent in consumer electronics retail.