Best Buy Q1 2026 Earnings Report

Introduction to Best Buy’s Quarterly Earnings

Best Buy on Thursday missed quarterly revenue expectations and cut its full-year sales and profit guidance as higher tariffs increase the costs of many consumer electronics that it sells. For its fiscal 2026, the retailer said it now expects $41.1 billion to $41.9 billion of revenue, down from its previous range of $41.4 billion to $42.2 billion. It said it expects adjusted earnings per share to range from $6.15 to $6.30, which compares with prior guidance of $6.20 to $6.60.

Impact of Tariffs on Best Buy

Best Buy already increased prices on some items to blunt the costs from tariffs, with changes taking effect by mid-May, CEO Corie Barry said on a call with reporters. She called price hikes "the very last resort" after the company takes other steps to offset higher expenses. But she declined to specify which items are affected, citing competitive reasons. First-quarter earnings reports have highlighted just how disruptive President Donald Trump’s ever-evolving trade policy has been to many U.S. companies that rely on a global supply chain. Best Buy joins other companies like Abercrombie & Fitch and Macy’s in cutting its profit outlook this week due to tariffs.

Comparison with Wall Street Expectations

Here’s how the consumer electronics company did compared with what Wall Street was expecting for the company’s fiscal first quarter:

• Earnings per share: $1.15 adjusted vs. $1.09 expected
• Revenue: $8.77 billion vs. $8.81 billion expected
  Shares of Best Buy closed at $66.32, down about 7%. Best Buy’s net income in the three-month period that ended May 3 declined about 18% to $202 million, or 95 cents per share, from $246 million, or $1.13 per share, in the year-ago period. Excluding one-time expenses, including restructuring charges for its Best Buy Health business, the company reported earnings of $1.15 per share.

Sales Performance

First-quarter revenue dropped from $8.85 billion in the year-ago period. Comparable sales, defined by Best Buy as revenue from online sales and stores open at least 14 months, dropped 0.7% year over year. In the U.S., comparable sales also fell 0.7% year over year as shoppers bought fewer home theaters, appliances and drones than a year ago. The company said weakness in those categories was partially offset by growth in the computing, mobile phone and tablet categories.

Adjustments to Tariffs

Best Buy is a closely watched name when it comes to the impact of tariffs since it sells iPhones, TVs, laptops, kitchen appliances and many other consumer electronics that tend to be made in China or other parts of Asia. That’s why Barry said on a March earnings call that the retailer would likely have to raise prices because of the duties. However, Barry said on a separate earnings call Thursday that Best Buy’s mix of imports has changed in recent months. China continues to be a major source of merchandise, but the country now accounts for 30% to 35% of its merchandise compared with the 55% metric that it shared in March.

Strategic Priorities

Barry on the Thursday earnings call outlined ways that Best Buy is adjusting to current tariffs, while acknowledging the backdrop could change after the court ruling. The vast majority of what the retailer sells — about 97% or 98% of its merchandise — is imported by vendors rather than directly by the company. Best Buy has encouraged vendors to manufacture in multiple countries, negotiated lower costs and adjusted the mix of merchandise that it carries, she said. On the earnings call, Barry pointed to Best Buy’s strategic priorities for the year that will help the company increase profits and control costs.

Conclusion

In conclusion, Best Buy’s quarterly earnings report highlights the impact of tariffs on the company’s sales and profit guidance. Despite the challenges, the company is taking steps to adjust to the current trade policy and is focusing on its strategic priorities to increase profits and control costs. With new product launches and growth in certain categories, Best Buy is well-positioned to navigate the changing retail landscape.

FAQs

Q: What is the expected revenue range for Best Buy’s fiscal 2026?
A: $41.1 billion to $41.9 billion
Q: How did Best Buy’s comparable sales perform in the first quarter?
A: Comparable sales dropped 0.7% year over year
Q: What is the impact of tariffs on Best Buy’s prices?
A: Best Buy has increased prices on some items to blunt the costs from tariffs
Q: What are Best Buy’s strategic priorities for the year?
A: Improving the customer experience, launching and growing its third-party marketplace and advertising businesses, and driving efficiency to fund strategic investments and offset pressures
Q: How did Best Buy’s net income perform in the first quarter?
A: Net income declined about 18% to $202 million, or 95 cents per share