MINNEAPOLIS, August 28, 2026, 08:48 EDT – Best Buy shares (BBY) fell 4.4% after the electronics retailer reported quarterly earnings above expectations but saw increased margin spending that tempered investor reaction.
- Shares of Best Buy declined by 4.4% on Thursday, with trading volume at 2.2 times the daily average.
- Revenue for the fiscal second quarter increased 3.6% to $9.78 billion.
- Comparable sales rose 4.1%, driven by gains in computing and home theater.
- Management increased its guidance for sales, margin, and adjusted EPS.
Best Buy’s market value dropped by about $780 million on Thursday, even after exceeding forecasts. Rising operating expenses led investors to doubt how long the positive momentum would last.
The shares ended the session at $83.56, falling 4.4%, with trading volume reaching 8.97 million. This represented 219% of its 65-day average volume MarketWatch.
Best Buy (NYSE: BBY) edged up 0.5% to $84.00 ahead of Friday’s opening bell. Premarket volume was thin, with 2,940 shares changing hands as of 08:05 EDT.
Revenue for the fiscal second quarter grew by 3.6% to $9.779 billion. Comparable sales for the enterprise were up 4.1%, versus 1.6% in the previous year company results.
| Metric | Q2 FY2027 | Q2 FY2026 | Change |
|---|---|---|---|
| Enterprise revenue | $9.779 billion | $9.438 billion | Up 3.6% |
| Enterprise comparable sales | Up 4.1% | Up 1.6% | Increase of 2.5 points |
| Domestic comparable sales | Up 4.5% | Up 1.1% | Rise of 3.4 points |
| Adjusted operating margin | 4.3% | 3.9% | Improved by 0.4 point |
| Adjusted diluted EPS | $1.47 | $1.28 | Up 15% |
| International revenue | $709 million | $740 million | Down 4.2% |
Domestic growth was fueled by computing, home theater, and emerging products, while traditional gaming partially countered those advances.
Domestic e-commerce sales rose 5.1% to $3.00 billion. Digital platforms accounted for 33.1% of total domestic revenue.
Domestic gross margin rose by 60 basis points to reach 24.0%. The increase was supported by Best Buy Ads, Marketplace activities and a $34 million tariff refund.
Adjusted domestic SG&A totaled $1.78 billion, accounting for 19.6% of revenue. The ratio was up from 19.3% previously.
Management pointed to compensation, advertising, and investments in Ads and Marketplace as factors. These expenses offset gains achieved from a higher gross margin.
Best Buy lifted its revenue outlook for the fiscal year to a range of $42.3–$42.8 billion, up from the previous guidance of $41.2–$42.1 billion.
Adjusted EPS forecast raised to a range of $6.70–$6.90, up from $6.30–$6.60 previously. The company now anticipates comparable-sales growth between 1.9% and 3.0%.
The company’s forecast for the third quarter is more cautious. Executives project like-for-like growth between 1% and 3%, with an adjusted operating margin anticipated at 4.1% to 4.2%.
Analyst opinion was split on Friday. Morgan Stanley and Guggenheim increased their price targets to $90 and $95 respectively, but UBS and Barclays maintained Hold ratings.
The stock is trading at 13.9 times trailing earnings, with a yield near 4.6%. While this valuation constrains the growth premium, it places a strong emphasis on delivering margins.
Risks. Demand for products may decline following upgrade cycles. Margins could also be pressured if tariffs, promotional activity or investment spending increase.
The following test concerns operating leverage. Investors expect that higher sales will yield more than just a slight rise in adjusted margin.
