Best Buy (BBY) Q3 2026 Earnings: Tech Replacement Cycle Fuels Rebound as Guidance Rises

As of Friday, November 28, 2025, Best Buy has turned into one of the most interesting retail stories of the holiday season. The electronics giant has just delivered better‑than‑expected fiscal Q3 2026 results, raised its full‑year guidance and, according to multiple analysts and media reports, is riding a powerful wave of device upgrades that’s offsetting a slump in consumer confidence. ^[1]

Below is a detailed look at what Best Buy reported, how the “tech replacement cycle” is driving the rebound, and what changed on November 28 as fresh valuation and Black Friday commentary hit the tape.

Headline Q3 FY26 numbers: a clean earnings beat

Best Buy’s third quarter of fiscal 2026 (for the period ended November 1, 2025) came in ahead of Wall Street expectations on both revenue and earnings. ^[2]

Key figures:

Revenue: About $9.67 billion, up roughly 2.4% year‑over‑year, and above analyst estimates around $9.57–$9.58 billion. ^[3]
Comparable (same‑store) sales:+2.7%, the strongest quarterly comp growth in roughly four years, driven by computing, gaming and mobile phones. ^[4]
Adjusted EPS:$1.40, beating consensus of roughly $1.30–$1.31 per share. On a GAAP basis, diluted EPS was $0.66, reflecting one‑time items. ^[5]
Domestic operations: U.S. revenue of about $8.9 billion, up just over 2%, with domestic comps up 2.4%. ^[6]
International operations: Revenue of around $794 million, up 6.1%, with international comps climbing 6.3%. ^[7]

Margins remain a mixed story: gross margin slipped about 30 basis points to 23.2%, while adjusted operating margin improved by roughly 30 basis points to about 4.0%, helped by lower‑than‑planned SG&A and efficiency initiatives. ^[8]

Management also highlighted that comps improved through the quarter — roughly +3% in August, +1% in September and +5% in October — underscoring momentum heading into the holiday period. ^[9]

Guidance raised: from “flat to down” to modest growth

On the back of this quarter, Best Buy raised its full‑year fiscal 2026 outlook:

Revenue: Now expected between $41.65–$41.95 billion, versus prior guidance of $41.1–$41.9 billion. ^[10]
Comparable sales: Now +0.5% to +1.2%, compared with an earlier range of –1.0% to +1.0%. That implies the first annual comp growth in about three years. ^[11]
Adjusted EPS: Raised to $6.25–$6.35 per share, up from $6.15–$6.30. ^[12]
Adjusted operating margin: Still targeted at roughly 4.2% for the full year. ^[13]

In other words, this is no longer a “stabilization only” story. Management is now explicitly guiding to modest top‑line growth in fiscal 2026, even while keeping margin expectations disciplined.

The tech replacement cycle: backbone of Best Buy’s rebound

The phrase that keeps showing up across coverage — including BNN Bloomberg’s investor outlook and several Wall Street notes — is “tech replacement cycle.” ^[14]

Several forces are converging:

Pandemic‑era gadgets are aging out. Many households bought laptops, monitors, TVs and gaming gear in 2020–2021. Best Buy and its advertising arm estimate that most consumer tech follows a 3–7 year upgrade cycle, meaning 2024–2026 is a prime window for replacements. ^[15]
Windows 10 support is ending. As Microsoft sunsets Windows 10, customers are nudged toward new PCs, often AI‑enabled laptops. Data from the quarter show a surge in desktop sales — close to 30% year‑over‑year in one internal analysis cited by TIKR — as users upgrade older machines. ^[16]
AI and new consoles are driving “must‑have” upgrades. From AI‑powered CoPilot+ PCs featured in Best Buy’s marketing, to the launch of Nintendo Switch 2, innovation is giving consumers reasons to spend, not just opportunities to save. ^[17]

Best Buy’s own numbers reflect this:

Computing comps grew for the seventh consecutive quarter, and categories like gaming and mobile phones also posted strong growth. ^[18]
Enterprise‑wide comps of +2.7% are being driven disproportionately by those upgrade‑heavy categories, partially offsetting weakness in home theater and appliances. ^[19]

CEO Corie Barry has repeatedly described consumers as “resilient but deal‑focused”, saying shoppers are willing to spend when they see real innovation or clear value, especially around predictable events like Black Friday. ^[20]

Consumers say they’re broke — but their carts say otherwise

The MediaPost piece “Best Buy Posts Gains While Consumer Mood Slumps” captures the paradox nicely: confidence surveys and actual spending are telling two different stories. ^[21]

Key tension points:

Sentiment is soft. A recent Gartner study cited in that article found that around 56% of U.S. adults are changing spending habits because they believe the country is in, or heading toward, a recession. Among Gen Z and millennials, that share is even higher. ^[22]
Willingness to splurge on tech remains. Despite that gloom, Best Buy’s Q3 results were “hotter than expected,” and the company now believes annual sales could edge higher this year after three straight years of declines. ^[23]
Confidence vs. behavior. Numerator data referenced in the MediaPost analysis show consumer comfort with discretionary spending at a four‑year low, yet spending on phones, gaming and TVs remains robust. ^[24]

Barry and her team frame it this way: the consumer isn’t monolithic. Higher‑income households (roughly the top 40% of earners) are still driving a disproportionate share of spending, while lower‑income shoppers are much more selective but still show up when there are compelling deals and clear value. ^[25]

Strategic engines: Marketplace, Best Buy Ads and AI‑driven efficiency

Beyond selling more gadgets, Best Buy is leaning into higher‑margin, less cyclical revenue streams and heavy automation:

Best Buy Marketplace. Launched in the U.S. this year, the third‑party marketplace already features 1,000+ sellers and has expanded SKU count more than tenfold in a few months, particularly in accessories and smaller appliances. Return rates are lower than the first‑party business, a positive margin signal. ^[26]
Best Buy Ads & “My Ads” platform. The company’s retail media network is described as “highly profitable” and is drawing more non‑endemic advertisers such as PayPal, Klarna, Capital One and QSR brands. A new self‑serve platform, My Ads, enables on‑site programmatic buying and advanced reporting. ^[27]
AI‑powered customer support and logistics. By using AI to triage customer contacts and optimize fulfillment, Best Buy cut customer interactions by about 17% and now fulfills more than 70% of online orders from the most efficient locations, improving delivery speed and reducing cost. ^[28]

These initiatives matter to investors because they support margin resilience even if headline sales stay choppy. Zacks, for example, points to increased marketplace and ad‑network contributions as a reason the adjusted operating margin rose 30 basis points year‑over‑year despite modest gross‑margin pressure. ^[29]

November 28, 2025: fresh valuation calls and Black Friday trading

By November 28 — Black Friday in the U.S. — the conversation around Best Buy had shifted from “Can it stabilize?” to “Is the stock now cheap, fairly valued or already pricing in the rebound?”

1. Simply Wall St: modest undervaluation, premium multiple

A new Simply Wall St note published on November 28, 2025 concludes that Best Buy is roughly 3.5% undervalued, with a fair‑value estimate of about $83.95 per share. ^[30]

Highlights from that analysis:

The stock has climbed nearly 6% over the past week as investors digest the earnings beat and guidance raise, but the 12‑month total shareholder return is still negative (around –5%). ^[31]
On their numbers, Best Buy trades at around 26.4× earnings, above both its immediate peer average (~21.8×) and the broader U.S. specialty retail sector (~18×). ^[32]
That premium suggests the market is paying up for improving profits and a streamlined strategy, but it also means the stock carries valuation risk if growth disappoints. ^[33]

In other words, Simply Wall St sees a mild undervaluation, but largely within the margin of error — this is not being painted as a deep value play.

2. TIKR: down 41% from highs, but 30% upside in their model

A detailed TIKR.com valuation piece, updated November 28, takes a more overtly bullish stance. ^[34]

Key points:

After adjusting for dividends, BBY has returned ~270% over the last decade, but the stock is still about 41% below its all‑time high, creating what the authors describe as a “buy‑the‑dip” opportunity. ^[35]
Using assumptions of 1.4% annual revenue growth, 4.5% operating margin, and a 12× exit P/E, their base‑case model projects BBY could climb from roughly $81 to about $105 per share by early 2028 — about 30% total upside, or 13% annualized. ^[36]
Their thesis leans heavily on multi‑year upgrade cycles in computing and mobile, plus scalable marketplace and ad‑network profits that could lift margins above historical levels if executed well. ^[37]

Even their low‑case scenario still assumes positive returns, though of course all of these projections are highly assumption‑driven.

3. Trading action on Black Friday

Despite the upbeat narrative, Best Buy didn’t soar on Black Friday itself:

Investopedia’s live market blog noted that BBY was more than 1% lower during the November 28 session, even as major indexes finished the shortened trading day higher. ^[38]
A separate note from Schaeffer’s Research cited BBY trading around $79–$80, down roughly 1–2%, and struggling with technical resistance near $84 while supported repeatedly around $72. The stock is still on track for a solid six‑month gain of about 20%, although year‑to‑date performance remains negative. ^[39]

So while the fundamentals have improved and longer‑term valuation debates are turning more constructive, short‑term trading on November 28 reflected some profit‑taking and broader sector rotation rather than unchecked euphoria.

4. Black Friday deals and shopper traffic

At the same time, Best Buy was one of the most aggressive discounters in consumer electronics:

A TradingView “key facts” note highlighted major Black Friday deals, including steep discounts on large‑screen Samsung TVs and popular laptops, as the retailer used promotions both to clear inventory and to capture replacement demand. ^[40]
Reuters’ separate reporting on Black Friday emphasized that more U.S. shoppers are buying online rather than lining up in stores — a trend that plays to Best Buy’s strengths in omnichannel fulfillment, curbside pickup and same‑day delivery. ^[41]

How this ties back to the November 28 news flow

Pulling all of this together, the November 28, 2025 news around Best Buy is less about new fundamental disclosures and more about how markets are absorbing the story:

Valuation reassessment
- Simply Wall St frames BBY as modestly undervalued but trading at a premium multiple versus peers, implying expectations for sustained earnings growth. ^[42]
- TIKR builds a detailed model that sees ~30% upside by 2028 if computing/mobile upgrade cycles and newer profit pools (marketplace, advertising) play out as expected. ^[43]
Short‑term stock behavior
- BBY shares have rallied strongly since the earnings release — Reuters and AP both noted a 5–6% jump in early trading after the report — but they drifted lower on Black Friday as traders locked in gains and the broader retail sector chopped sideways. ^[44]
Narrative consolidation
- Across BNN’s investor outlook, MediaPost’s consumer‑behavior lens and multiple equity‑research write‑ups, the core narrative is now consistent: Best Buy is a leveraged play on the tech replacement cycle, offset by macro uncertainty and tariff‑related cost pressures. ^[45]

Key risks investors should keep in mind

Despite the more optimistic tone, several risks remain front‑and‑center in the coverage:

Macro and consumer‑confidence risk: Surveys show consumers still wary, and a deeper slowdown could quickly hit discretionary tech spending. ^[46]
Tariffs and supply‑chain pressures: Ongoing U.S. tariffs on imported electronics raise input costs; Best Buy has mitigated some of this via supplier negotiations and diversification, but it can’t absorb everything forever. ^[47]
Category concentration: Computing, tablets and gaming are doing the heavy lifting. If the upgrade cycle is shorter‑lived than expected, or if AI PC adoption stalls, growth could fade quickly. ^[48]
Margin pressure from promotions: Aggressive discounting around Black Friday and the holidays may support revenue but squeeze margins, especially with tariffs and freight costs still elevated. ^[49]

What to watch next

For readers and investors tracking Best Buy after the November 28 news cycle, the main signposts are:

Holiday‑quarter comp sales and margins
- Management has guided Q4 comps to –1% to +1%; where the quarter lands in that range will help confirm (or challenge) the upgrade‑cycle thesis. ^[50]
Marketplace and ad‑network growth metrics
- Any disclosure on marketplace GMV, ad‑network revenue growth or margins will be critical, since many valuation models assume these high‑margin streams expand meaningfully over time. ^[51]
Stock’s ability to break through resistance
- Technical commentary points to a stubborn ceiling near $84; a decisive move above that level could signal that the market is embracing the longer‑term bull case laid out in recent valuation work. ^[52]
New data on consumer confidence and inflation
- Because so much of the Best Buy story hinges on a fragile but still‑spending consumer, upcoming confidence surveys, wage data and inflation prints will shape how sustainable this rebound looks. ^[53]

Final thought

As of November 28, 2025, Best Buy has managed something many retailers are still struggling to pull off: growing comps, raising guidance and attracting fresh bullish models in the face of gloomy consumer sentiment. Whether BBY turns out to be a genuine comeback story or a “value trap” dressed up by a one‑time upgrade wave will depend on how long the tech replacement cycle lasts — and how far Best Buy can push its marketplace, media and AI‑driven efficiencies to cushion the next downturn.