Best Buy delivered a Q1 beat with 2% comparable sales growth and raised EPS, driven by strong demand in gaming and computing. Management highlighted significant momentum in May, including a recovery in appliances and TVs, and maintained full-year guidance. The call also outlined strategic initiatives including new store formats, partner launches, and the rollout of a membership reward points program. Q1 comps grew 2% (vs. ~1% guide), with EPS of $1.28, up 11% YoY.
Best Buy delivered a Q1 beat with 2% comparable sales growth and raised EPS, driven by strong demand in gaming and computing. Management highlighted significant momentum in May, including a recovery in appliances and TVs, and maintained full-year guidance. The call also outlined strategic initiatives including new store formats, partner launches, and the rollout of a membership reward points program. Q1 comps grew 2% (vs. ~1% guide), with EPS of $1.28, up 11% YoY.
Management expressed confidence in strategic initiatives, highlighted strong Q1 results and multiple growth drivers, and conveyed optimism about future innovation and store expansion.
Q1 comps grew 2% (vs. ~1% guide), with EPS of $1.28, up 11% YoY.
Q2 started strong with May comps up high single digits, but the full-quarter guide is only ~1% due to lapping the Switch 2 launch.
The major appliance category, a key pressure point, turned to positive demand growth in May month-to-date.
Management is leveraging AI to enhance the customer experience and show up where customers look for tech advice, with partnerships with companies like OpenAI and Google, positioning AI as a driver of reach and insights.
May comps up high single digits, appliances turn to growth. Management expressed confidence in strategic initiatives, highlighted strong Q1 results and multiple growth drivers, and conveyed optimism about future innovation and store expansion.
Management expressed confidence in strategic initiatives, highlighted strong Q1 results and multiple growth drivers, and conveyed optimism about future innovation and store expansion.
“Comparable sales have started strong in May with a month-to-date growth of up high single digits.”
“So you are right, we do have an opportunity where we're the only national retailer that has this product. Um, and, uh, that that is a timeframe that's a year...”
“At this point, we do not see indications of material inventory supply constraints for the rest of FY27.”
“We've already seen material improvement in our trends this quarter, with months to date growth in demand versus last year.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Op margin | FY2027 Q2 | 3.9% | 3.9% | GUIDED |
Best Buy is partnering with Google AI to ensure its products appear in relevant AI-generated recommendations, creating a new demand channel.
“We will continue to partner with AI companies like OpenAI and Google to make sure we're showing up in the places where customers look for technology and advice.”
… need. We'll continue to expand what we offer, not only through Marketplace, but also in our 1P business, capitalizing on key customer trends such as trading cards and collectibles, and creating the experiences that drive relevancy and frequency with our customers. The goal isn't simply to explore new areas of business, but it's about using our unique insights about customers to become a major player in new and growing categories. We will continue to partner with AI companies like OpenAI and Google to make sure we're showing up in the places where customers look for technology and advice. These AI partnerships and others to come will enhance our experience. And by participating and showing up on those touch points, we reinforce the trust we've built and continue to build with our customers every day. The third priority, we are elevating the Best Buy experience. This priority is truly foundational to our vision nearly 60 years in the making. Without elevating the Best Buy experience, none of the other priorities can succeed. No matter how we evolve, we're committed to being competitive on price and delivering excellence across every customer experience. Every decision, every …
Meta is investing in physical retail presence through dedicated, staffed lab spaces within Best Buy stores, indicating a push to accelerate consumer adoption of its VR and AI glasses products.
“In 50 stores over the next two quarters, these open spaces will be filled with a new Meta experience that spans their AI glasses and VR categories. Branded Meta Labs at Best Buy, these 900 square foot areas will be staffed by employees”
… in our digital sales experience for major appliances online. Earlier, I mentioned opening new small format and medium sized stores. In our larger stores, we continue to improve the look and feel by using our space and square footage more strategically. Specifically, we're consolidating empty space in approximately 70 stores and then using those new open spaces for value generation initiatives. In 50 stores over the next two quarters, these open spaces will be filled with a new Meta experience that spans their AI glasses and VR categories. Branded Meta Labs at Best Buy, these 900 square foot areas will be staffed by employees specialized and dedicated to the Meta experience. In the other 20 stores, depending on location, we are leveraging the space for our Yardbird outdoor furniture shop or our outlet assortment. We are excited about this strategy and have hundreds of stores where this can be employed over the next few years. Last month, we announced an exciting development in our membership program. Starting next week, we are introducing rewards points for 8 million paid members. Our My Best Buy Plus and total members will earn 1% back in rewards on every eligible purchase …
Strong demand for the Switch 2, alongside software tie-ins, is driving a significant gaming category comp, suggesting Nintendo is seeing a blockbuster product cycle.
“We delivered stronger than expected sales performance in the gaming category across the three major consoles, Switch 2, PS5, and Xbox.”
… benefit over time. Our Best Buy ads and marketplace initiatives exceeded their performance targets. We are pleased with our progress, and both delivered another quarter of positive contribution to gross profit rates. Our domestic marketplace GMB reached approximately $250 million in the first quarter. In fact, when including our marketplace GMB, our domestic sales growth for the quarter was more than 4%. From a category perspective, we delivered stronger than expected sales performance in the gaming category across the three major consoles, Switch 2, PS5, and Xbox. This gaming growth was supported by demand for popular software titles like Pokemon Pocopia. We also saw strong growth in newer and emerging categories, including AI glasses, 3D printers, collectibles like trading cards, health rings, and PC gaming handhelds. Sales for this group of categories doubled versus last year. In computing, we delivered our ninth consecutive quarter of positive comparable sales, driven by a combination of customer need to upgrade and replace and product innovation. Our Q1 computing sales were also supported by strong performance from our Best Buy business team, which grew 15% overall, …
Best Buy is augmenting its computing inventory for the rest of fiscal 2027, which is leading to an 8% inventory growth, yet they do not expect material product shortages. — The company is pulling forward supply to manage memory cost inflation, but the statement indicates that PC OEM supply chains are healthy and can meet demand, despite component price pressures.
… have been increasing and product price increases have been flowing into our assortment. In Q1, our blended computing ASP was flat to last year, largely as a result of product mix and the staggered implementation of these product price increases. As we look into Q2 and the rest of the year, we expect our blended ASP and computing to rise, and we expect some elasticity to lead to lower units. However, we expect the magnitude to be significantly muted due to our assortment strategy. Most customers come to us with a budget. And through our broad assortment of products and price points find a great product within that budget we've seen evidence of this with our customer behavior in the past situations, most recently in response to tariffs. We have also made some strategic decisions to pull forward supply in certain areas to alleviate these impacts. As you can see from the growth in our inventory in our balance sheet in the first quarter. At this point, we do not see indications of material inventory supply constraints for the rest of FY27. This is a dynamic situation, and we will continue to partner closely with our vendors to mitigate impacts. I will now turn the call over to Matt.
Best Buy holds a one-year exclusive national retail partnership for the launch of RGB TV technology, a major new display innovation. — This exclusive access to a new, compelling technology could drive significant traffic and sales, differentiating Best Buy from online competitors and other big-box retailers.
After a long period of decline, Best Buy's major appliance category turned to demand growth in May month-to-date, driven by investments in pricing, marketing, availability, and delivery speed. — This signals a potential bottom and recovery in the large appliance market, which has been pressured by a stagnant housing market, offering a positive read for major appliance manufacturers.
… brings an increased level of energy and excitement to the whole category. Moving to appliances, our sales in this category have been pressured for quite some time due to the stagnant housing market and a very competitive retail environment. We've been testing several initiatives and are taking decisive actions in Q2 that we expect to drive improved results. These include investments in pricing, marketing, product availability, and delivery speed. We've already seen material improvement in our trends this quarter, with months to date growth in demand versus last year. Later this quarter, we also expect to implement material improvements in our digital sales experience for major appliances online. Earlier, I mentioned opening new small format and medium sized stores. In our larger stores, we continue to improve the look and feel by using our space and square footage more strategically. Specifically, we're consolidating empty space in approximately 70 stores and then using those new open spaces for value generation initiatives. In 50 stores over the next two quarters, these open spaces will be filled with a new Meta experience that spans their AI glasses and VR categories. Branded …