Abstract

Best Buy will report fiscal second-quarter results on August 27, 2026 Pre-MKt, with consensus pointing to revenue of 9.57 billion US dollars and adjusted EPS of 1.36, and with investor attention centered on comparable sales momentum, margin mix from marketplace and advertising, and the durability of category recoveries into late summer.

Market Forecast

Consensus for the current quarter anticipates revenue of 9.57 billion US dollars, up 3.59% year over year, adjusted EPS of 1.36, up 12.47% year over year, and EBIT of 381.34 million US dollars, up 12.95% year over year; company commentary following the last report indicated fiscal Q2 comparable sales growth of about 1.0%. Margin forecasts were not explicitly provided, though investor models generally bake in a modest mix-driven improvement as higher-margin marketplace and retail media contributions scale.

The main business is expected to be led by computing and mobile phones, with back-to-school demand and renewed upgrade cycles supporting volumes, while televisions and newer product categories help stabilize traffic; appliances remain a watch area given recent softness. The most promising growth engine remains services tied to marketplace and Best Buy Ads, which generated 872.99 million US dollars last quarter and has been linked to higher gross profit rates; management pointed to comparable sales growth of about 1.0% year over year for fiscal Q2, and several analysts expect category demand in computing and mobile to be a key contributor to this chainwide uplift.

Last Quarter Review

Best Buy delivered fiscal Q1 results with revenue of 8.94 billion US dollars (up 1.93% year over year), a gross profit margin of 23.52%, GAAP net profit attributable to the parent company of 276.00 million US dollars, a net profit margin of 3.09%, and adjusted EPS of 1.28 (up 11.30% year over year). The company highlighted a return to positive comparable sales at 2.0% year over year, with category strength in gaming, computing, and mobile phones; adjusted EPS exceeded expectations as the mix of marketplace and retail media improved unit economics despite lower product margins in some categories.

Main business highlights showed computing and mobile phones as the largest revenue component at 4.22 billion US dollars, consumer electronics at 2.32 billion US dollars, appliances at 879.86 million US dollars, services at 872.99 million US dollars, entertainment at 625.52 million US dollars, and other categories at 13.74 million US dollars; computing, mobile, gaming, and services posted growth, while appliances remained softer.

Current Quarter Outlook (with major analytical insights)

Core business trajectory: computing, mobile, TVs, and seasonal demand

Best Buy’s core sales line for fiscal Q2 centers on computing, mobile phones, and televisions, with the seasonal back-to-school window providing a critical demand bridge between late summer and early fall. Company commentary following fiscal Q1 pointed to about 1.0% comparable sales growth for fiscal Q2, which aligns with a modest rebound thesis in core categories. Several analysts anticipate that AI-enabled laptops, broader PC refreshes, and new smartphone cycles could lift unit turns and average selling prices enough to offset isolated price investments or promotions. The interplay of category mix should matter for the topline and for gross profit rates—televisions and premium audio often require compelling in-store marketing, but the attach of services and accessories can improve per-transaction profitability. Importantly, the company’s recent performance indicated that new profit streams, including marketplace and retail media, complemented core sales by enhancing the gross profit rate even when product margin rates faced pressure. For the current quarter, this mechanism provides a cushion as demand normalizes, and it sets a path for sustained EBIT leverage if volumes hold near guidance. Risks to this core trajectory include rising memory component costs and the potential need for targeted promotions should competitor pricing intensify; however, investor models suggest that incremental gross profit per transaction can still expand via better attach and media monetization, supporting the 12.95% year-over-year EBIT growth embedded in consensus.

Promising growth engine: services, marketplace, and Best Buy Ads

Services and new profit streams form the company’s most promising growth engine in fiscal Q2, evidenced by last quarter’s 872.99 million US dollars contribution in the services line and management’s emphasis on the marketplace and Best Buy Ads as drivers of gross profit rate expansion. Marketplace offers an expanded assortment without the inventory burden of owned product, while retail media monetizes traffic and vendor relationships, contributing higher incremental margins than traditional hardware sales. The financial logic is straightforward: expanding marketplace and media revenues add a higher-margin layer on top of product transactions, improving overall gross profit rates even when product categories mix toward promotional or lower-margin items. In the current quarter, as consensus looks for revenue up 3.59% year over year and adjusted EPS up 12.47% year over year, services and media monetization provide the bridge between mid-single-digit topline growth and double-digit earnings growth. The company’s internal view for comparable sales growth of about 1.0% year over year, taken together with external expectations that computing, mobile, and newer product categories are aiding comps, implies that even modest unit growth can translate into outsized EBIT if marketplace and ads scale as planned. This mix benefit is also central to investor interest in Best Buy’s model, as it demonstrates how the chain can enhance economics irrespective of macro variability in big-ticket categories. Sustained execution here—growing the marketplace seller base, deepening vendor media budgets, and improving attach of subscription services—would likely keep gross profit rates well supported through fiscal Q2 and into the holiday build.

Key stock-price drivers: comparable sales, margin mix, and operating execution

Three variables appear most consequential for share price behavior around the print: comparable sales trends through late August, gross profit rate performance tied to marketplace and advertising, and operating execution amid leadership transition and cost dynamics. On sales, several external previews point to chainwide comparable sales rising between roughly 1.0% and 2.4% year over year, with computing, mobile, TVs, and select new technologies serving as key supports; upside or downside relative to that corridor will likely swing the stock. On margins, investors will parse whether higher-margin services and media can offset any category-level product margin compression; the last quarter’s 23.52% gross profit margin provides a reference point, and incremental gains are plausible if the services mix continues to improve. On execution, attention will fall on inventory discipline, promotional cadence heading into September, and any update on leadership changes and technology roadmaps; efficient fulfillment, strong in-store conversion, and continued attach of services and protection plans can all contribute to EBIT resilience. Combined, these elements underpin the consensus trajectory of revenue up 3.59% year over year and EBIT up 12.95% year over year; better-than-expected growth in services and media could produce upside to adjusted EPS, while a softer-than-anticipated appliance recovery or heavier promotions could constrain the flow-through.

Analyst Opinions

Bullish views represent the majority of recent commentary versus outright bearish calls, with positive ratings and constructive previews outnumbering negative stances by a wide margin in the period since January 1, 2026. Truist Securities upgraded Best Buy to Buy and lifted its price target to 95 US dollars, emphasizing demand improvements in core categories, operational adjustments such as delivery optimization, and contributions from new product cycles, including AI-oriented wearables and devices. Jefferies reiterated a Buy with a higher target of 89 US dollars, citing strengthening demand indicators and the scaling of new profit drivers—specifically the marketplace and retail media businesses—as supports for ongoing gross profit rate improvement and earnings leverage. Telsey Advisory also maintained a Buy/Outperform stance while raising its target, highlighting category recoveries and durable contribution from services. A prominent bank preview noted that Q2 outcomes could surpass consensus on comps and that gross margin could improve as higher-margin marketplace and advertising contributions expand, though it cautioned that rising component costs and tougher comparisons might cap upside in the near term.

The core thread across these bullish perspectives is that Best Buy’s revenue growth trajectory appears anchored by healthy category-level activity in computing, mobile, and televisions, while the company’s marketplace and retail media strategy is improving margin structure and EBIT leverage. This framework aligns with consensus forecasts for the quarter: revenue of 9.57 billion US dollars, up 3.59% year over year; adjusted EPS of 1.36, up 12.47% year over year; and EBIT of 381.34 million US dollars, up 12.95% year over year. Bulls argue that even if headline product margins remain pressured by competitive pricing or promotional intensity, the mix uplift from services, marketplace, and advertising can keep gross profit rates on a gradual upward glide path. This mix shift is deemed repeatable as vendor partners allocate more budget to retail media and as the marketplace continues to deepen assortment without proportionally increasing inventory risk.

Supportive analysts also point to the company’s guidance for about 1.0% comparable sales growth in fiscal Q2, considering this as a baseline that may prove conservative if back-to-school demand and category refresh cycles present stronger sell-through than mid-summer trends implied. They note that computing refreshes, AI PC marketing, and premium smartphone launches can drive shoppers into stores and onto digital channels, where attach opportunities—protection plans, subscriptions, and accessories—provide incremental gross profit. In their view, even modest sales outperformance can translate into a disproportionate earnings benefit because the higher-margin layers (marketplace and Best Buy Ads) scale with traffic and vendor engagement. In addition, differentiated in-store demonstrations and trained associates can lift conversion for complex products, which, when paired with services, elevates per-transaction profitability.

These bullish assessments acknowledge practical sensitivities, but they ultimately maintain that the earnings algorithm remains intact for the quarter: modest comparable sales increase, small mix-led gross margin improvement, and double-digit adjusted EPS growth versus last year. The emphasis is on execution continuity in scaling marketplace and advertising, along with category-level momentum sufficient to validate the top-line trajectory. With multiple well-known institutions on the positive side and a set of constructive previews pointing to comps, margin mix, and EBIT leverage as near-term supports, the prevailing outlook into the August 27, 2026 Pre-MKt release leans constructive on both the revenue and earnings lines.