bby-20260502

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 2, 2026


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-9595

BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)


Minnesota						41-0907483
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

7601 Penn Avenue South Richfield, Minnesota						55423
(Address of principal executive offices)						(Zip Code)

(612) 291-1000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, $0.10 par value per share	BBY	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant had 210,767,126 shares of common stock outstanding as of June 3, 2026.

Table of Contents

BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED MAY 2, 2026

TABLE OF CONTENTS

Part I — Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of May 2, 2026 , January 31, 2026 , a nd May 3, 202 5

Condensed Consolidated Statements of Earnings for the three months ended May 2, 2026 , and May 3, 2025

Condensed Consolidated Statements of Comprehensive Income for the three months ended May 2, 2026 , and May 3, 2025

Condensed Consolidated Statements of Cash Flows for the three months ended May 2, 2026 , and May 3, 202 5

Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended May 2, 2026 , and May 3 , 202 5

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II — Other Information

Item 1.

Legal Proceedings

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We disclose information to the public concerning Best Buy, Best Buy’s products, content and services and other items through our websites in order to achieve broad, non-exclusionary distribution of information to the public. Some of the information distributed through this channel may be considered material information. Investors and others are encouraged to review the information we make public in the locations below.* This list may be updated from time to time.

•For information concerning Best Buy and its products, content and services, please visit: https://bestbuy.com.

•For information provided to the investment community, including news releases, events and presentations, and filings with the SEC, please visit: https://investors.bestbuy.com.

•For the latest information from Best Buy, including press releases, please visit: https://corporate.bestbuy.com/archive/.

* These corporate websites, and the contents thereof, are not incorporated by reference into this Quarterly Report on Form 10-Q nor deemed filed with the SEC.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)


	May 2, 2026		January 31, 2026		May 3, 2025
Assets
Current assets
Cash and cash equivalents	$	1,749	$	1,738	$	1,147
Receivables, net	906		1,043		744
Merchandise inventories	5,598		5,230		5,194
Other current assets	487		493		500
Total current assets	8,740		8,504		7,585
Property and equipment, net	1,987		1,986		2,089
Operating lease assets	2,870		2,869		2,821
Goodwill	790		790		908
Other assets	503		521		725
Total assets	$	14,890	$	14,670	$	14,128

Liabilities and equity
Current liabilities
Accounts payable	$	5,118	$	4,745	$	4,670
Unredeemed gift card liabilities	229		235		246
Deferred revenue	843		900		891
Accrued compensation and related expenses	317		423		367
Accrued liabilities	665		742		617
Current portion of operating lease liabilities	614		623		611
Current portion of long-term debt	11		11		10
Total current liabilities	7,797		7,679		7,412
Long-term operating lease liabilities	2,343		2,334		2,277
Long-term debt	1,158		1,165		1,153
Long-term liabilities	509		528		523
Contingencies (Note 10)
Equity
Best Buy Co., Inc. Shareholders' Equity
Preferred stock, $1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none	-		-		-
Common stock, $0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 210.7 million, 209.1 million and 211.3 million shares, respectively	22		22		22
Additional paid-in capital	65		14		-
Retained earnings	2,677		2,610		2,428
Accumulated other comprehensive income	319		318		313
Total equity	3,083		2,964		2,763
Total liabilities and equity	$	14,890	$	14,670	$	14,128

NOTE: The Consolidated Balance Sheet as of January 31, 2026, has been condensed from the audited consolidated financial statements.

See Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Earnings

$ and shares in millions, except per share amounts (unaudited)


	Three Months Ended
	May 2, 2026		May 3, 2025
Revenue	$	8,936	$	8,767
Cost of sales	6,834		6,718
Gross profit	2,102		2,049

Selling, general and administrative expenses	1,741		1,721

Restructuring charges	(9)		109

Operating income	370		219

Other income (expense):

Investment income and other	19		15
Interest expense	(11)		(12)
Earnings before income tax expense and equity in loss of affiliates	378		222
Income tax expense	102		19

Equity in loss of affiliates	-		(1)
Net earnings	$	276	$	202

Basic earnings per share	$	1.31	$	0.95
Diluted earnings per share	$	1.31	$	0.95

Weighted-average common shares outstanding:
Basic	210.4		212.0
Diluted	211.3		213.0

See Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)


	Three Months Ended
	May 2, 2026		May 3, 2025
Net earnings	$	276	$	202
Foreign currency translation adjustments, net of tax	1		13
Comprehensive income	$	277	$	215

See Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	Three Months Ended
	May 2, 2026		May 3, 2025
Operating activities
Net earnings	$	276	$	202
Adjustments to reconcile net earnings to total cash provided by operating activities:
Depreciation and amortization	194		211
Restructuring charges	(9)		109

Stock-based compensation	40		40
Deferred income taxes	10		(51)


Other, net	1		(2)
Changes in operating assets and liabilities:
Receivables	138		298
Merchandise inventories	(367)		(95)
Other assets	12		7
Accounts payable	349		(330)
Income taxes	42		7
Other liabilities	(311)		(362)
Total cash provided by operating activities	375		34

Investing activities
Additions to property and equipment	(160)		(166)


Total cash used in investing activities	(160)		(166)

Financing activities
Repurchase of common stock	-		(100)
Dividends paid	(202)		(202)

Other, net	-		(3)
Total cash used in financing activities	(202)		(305)

Effect of exchange rate changes on cash and cash equivalents	-		4
Increase (decrease) in cash, cash equivalents and restricted cash	13		(433)
Cash, cash equivalents and restricted cash at beginning of period	2,023		1,868
Cash, cash equivalents and restricted cash at end of period	$	2,036	$	1,435

See Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Changes in Shareholders' Equity

$ and shares in millions, except per share amounts (unaudited)


	Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total










Balances at January 31, 2026	209.1	$	22	$	14	$	2,610	$	318	$	2,964
Net earnings, three months ended May 2, 2026	-	-		-		276		-		276
Other comprehensive income:
Foreign currency translation adjustments, net of tax	-	-		-		-		1		1
Stock-based compensation	-	-		40		-		-		40
Issuance of common stock	1.6	-		4		-		-		4
Common stock dividends, $0.96 per share	-	-		7		(209)		-		(202)

Balances at May 2, 2026	210.7	$	22	$	65	$	2,677	$	319	$	3,083











Balances at February 1, 2025	211.4	$	22	$	-	$	2,486	$	300	$	2,808
Net earnings, three months ended May 3, 2025	-	-		-		202		-		202
Other comprehensive income:
Foreign currency translation adjustments, net of tax	-	-		-		-		13		13
Stock-based compensation	-	-		40		-		-		40
Issuance of common stock	1.5	-		2		-		-		2
Common stock dividends, $0.95 per share	-	-		6		(208)		-		(202)
Repurchase of common stock	(1.6)	-		(48)		(52)		-		(100)
Balances at May 3, 2025	211.3	$	22	$	-	$	2,428	$	313	$	2,763

See Notes to Condensed Consolidated Financial Statements.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation

Unless the context otherwise requires, the terms “Best Buy,” “we,” “us,” “our” and the “company” in these Notes to Condensed Consolidated Financial Statements refer to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the U.S. (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. The first three months of fiscal 2027 and fiscal 2026 each included 13 weeks. Unless otherwise noted, references to years in these notes to condensed consolidated financial statements relate to fiscal years, not calendar years.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from May 2, 2026, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified.

Unadopted Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 Form 10-K.

Supply Chain Financing

We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution. Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $861 million, $600 million and $569 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively.

Total Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the totals shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions):


	May 2, 2026		January 31, 2026		May 3, 2025
Cash and cash equivalents	$	1,749	$	1,738	$	1,147
Restricted cash included in Other current assets	287		285		288
Total cash, cash equivalents and restricted cash	$	2,036	$	2,023	$	1,435

Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities.

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2. Restructuring

Restructuring charges were as follows ($ in millions):


	Three Months Ended
	May 2, 2026		May 3, 2025
Fiscal 2026 Labor and Store Optimization Initiative	$	(8)	$	-
Best Buy Health Optimization and China Sourcing Initiative	(1)		111
Fiscal 2024 Restructuring Initiative	-		(2)
Total	$	(9)	$	109

Fiscal 2026 Labor and Store Optimization Initiative

In the second quarter of fiscal 2026, we commenced a restructuring initiative intended to align field resources with changing customer behaviors, close select non-traditional store locations and redirect corporate resources for better alignment with our strategy. We currently do not expect to incur material future restructuring charges related to this initiative.

All charges incurred related to this initiative were from continuing operations and presented within Restructuring charges on our Condensed Consolidated Statements of Earnings. The composition of restructuring charges incurred related to this initiative were as follows ($ in millions):



	Three Months Ended May 2, 2026		Cumulative Amount as of May 2, 2026
	Domestic			Domestic		International		Total
Termination benefits	$	(7)		$	61	$	3	$	64
Asset impairments and other costs(1)	(1)			45		-		45
Total	$	(8)		$	106	$	3	$	109

(1)Cumulative amount as of May 2, 2026 primarily represents asset impairments related to planned store closures, an impairment related to an indefinite-lived tradename and other exit costs. The remaining carrying value of net assets approximates fair value and was immaterial as of May 2, 2026.

Restructuring accrual activity related to this initiative was as follows ($ in millions):


	Termination Benefits
	Domestic		International		Total
Balances at January 31, 2026	$	42	$	3	$	45

Cash payments	(8)		(1)		(9)
Adjustments(1)	(7)		-		(7)
Balances at May 2, 2026	$	27	$	2	$	29

(1)Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes.

Our restructuring accrual liabilities primarily related to termination benefits of $29 million as of May 2, 2026, reflect expected future cash payments primarily during fiscal 2027 and fiscal 2028.

Best Buy Health Optimization and China Sourcing Initiative

In the first quarter of fiscal 2026, we commenced a restructuring initiative primarily focused on optimizing our Best Buy Health business by taking actions to maximize value and improve profitability in light of its performance against our original forecasting. These actions included the exit of a component of our Best Buy Health business that was finalized during the second quarter of fiscal 2026. In addition, we also made significant changes to reduce our exposure to tariffs, particularly in China. We currently do not expect to incur material future restructuring charges related to this initiative and no material liability remains as of May 2, 2026.

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Fiscal 2024 Restructuring Initiative

During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to align field labor resources with where customers want to shop and to optimize the customer experience, redirect corporate resources for better alignment with our strategy and right-size resources to better align with our revenue outlook for fiscal 2025. There were no expenses incurred related to this initiative in the first quarter of fiscal 2027, and we do not expect to incur material future restructuring charges related to this initiative.

The only remaining restructuring accrual related to this initiative relates to our Domestic segment and was as follows ($ in millions):


	Termination Benefits

Balance at January 31, 2026	$	31
Cash payments	(1)

Balance at May 2, 2026	$	30

Our restructuring accrual liability related to termination benefits of $30 million as of May 2, 2026, reflects expected future cash payments primarily during fiscal 2028.

3. Goodwill

Goodwill balances by segment were as follows ($ in millions):


	May 2, 2026				January 31, 2026				May 3, 2025
	Gross Carrying Amount		Cumulative Impairment		Gross Carrying Amount		Cumulative Impairment (1)		Gross Carrying Amount		Cumulative Impairment
Domestic	$	1,450	$	(660)	$	1,450	$	(660)	$	1,450	$	(542)
International	608		(608)		608		(608)		608		(608)
Total	$	2,058	$	(1,268)	$	2,058	$	(1,268)	$	2,058	$	(1,150)

(1)In the third quarter of fiscal 2026, we recorded a goodwill impairment of $118 million within the Domestic segment for the Best Buy Health reporting unit.

4. Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and liabilities accounted for at fair value were as follows ($ in millions):


			Fair Value as of
	Balance Sheet Location(1)	Fair Value Hierarchy	May 2, 2026		January 31, 2026		May 3, 2025
Assets
Money market funds(2)	Cash and cash equivalents	Level 1	$	77	$	143	$	79
Time deposits(3)	Cash and cash equivalents	Level 2	200		252		232
Commercial paper(2)	Cash and cash equivalents	Level 2	-		37		-
Money market funds(2)	Other current assets	Level 1	124		123		142
Time deposits(3)	Other current assets	Level 2	30		30		50
Marketable securities that fund deferred compensation(4)	Other assets	Level 1	41		41		38
Liabilities
Interest rate swap derivative instruments(5)	Long-term liabilities	Level 2	8		1		8

(1)Balance sheet location is determined by the length to maturity at date of purchase and whether the assets are restricted for particular use.

(2)Valued at quoted market prices in active markets at period end.

(3)Valued at face value plus accrued interest at period end, which approximates fair value.

(4)Valued using the performance of mutual funds that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis.

(5)Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. See Note 5, Derivative Instruments, for additional information.

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Nonrecurring Fair Value Measurements

In the first quarter of fiscal 2026, we recorded asset impairments and other costs related to our Best Buy Health Optimization and China Sourcing Initiative. These nonrecurring fair value remeasurements were based on significant unobservable inputs (Level 3). Refer to Note 2, Restructuring, for additional information.

Fair Value of Financial Instruments

Long-term debt is presented at carrying value on our Condensed Consolidated Balance Sheets. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. Long-term debt balances were as follows ($ in millions):


	May 2, 2026				January 31, 2026				May 3, 2025
	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt(1)	$	1,075	$	1,142	$	1,089	$	1,149	$	1,043	$	1,142

(1)Excludes debt discounts, issuance costs and finance lease obligations.

5. Derivative Instruments

The net notional amounts of our derivative instruments were as follows ($ in millions):


	May 2, 2026		January 31, 2026		May 3, 2025
Derivatives designated as net investment hedges	$	119	$	119	$	119
Derivatives designated as fair value hedges (interest rate swaps)	500		500		500
No hedge designation (foreign exchange contracts)	31		34		54
Total	$	650	$	653	$	673

Effects of our fair value hedges included in Interest expense on our Condensed Consolidated Statements of Earnings were as follows ($ in millions):


	Gain (Loss) Recognized
	Three Months Ended
	May 2, 2026		May 3, 2025
Interest rate swaps	$	(7)	$	6
Adjustments to carrying value of long-term debt	7		(6)
Total	$	-	$	-

6. Debt

Short-Term Debt

U.S. Revolving Credit Facility

We have a $1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2030. There were no borrowings outstanding under the Five-Year Facility Agreement as of May 2, 2026, January 31, 2026, or May 3, 2025.

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Long-Term Debt

Long-term debt consisted of the following ($ in millions):


	May 2, 2026		January 31, 2026		May 3, 2025
Notes, 4.45%, due October 1, 2028 ("2028 Notes")	$	500	$	500	$	500
Notes, 1.95%, due October 1, 2030 ("2030 Notes")	650		650		650
Interest rate swap valuation adjustments	(8)		(1)		(8)
Subtotal	1,142		1,149		1,142
Debt discounts and issuance costs	(5)		(5)		(6)
Finance lease obligations	32		32		27
Total long-term debt	1,169		1,176		1,163
Less current portion

SEC Form 10-Q filed by Best Buy Co. Inc.