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1. Company Snapshot

1.a. Company Description

Best Buy Co., Inc.retails technology products in the United States and Canada.The company operates in two segments, Domestic and International.


Its stores provide computing products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products.The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods.In addition, it provides consultation, delivery, design, health-related, installation, memberships, repair, set-up, technical support, and warranty-related services.


The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird, as well as domain names bestbuy.com, currenthealth.com, lively.com, yardbird.com, and bestbuy.ca.As of January 30, 2022, it had 1,144 stores.The company was formerly known as Sound of Music, Inc.


The company was incorporated in 1966 and is headquartered in Richfield, Minnesota.

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1.b. Last Insights on BBY

Best Buy Co., Inc.'s recent performance was driven by strong Q3 2026 earnings, with revenue increasing 2.4% year-over-year to $9.7 billion and adjusted operating income rate of 4%, surpassing expectations. The company's growth was fueled by higher comparable sales, robust online growth, and strong demand for consumer electronics. Additionally, its strategic initiatives, such as the third-party marketplace and Ads business, provide paths for margin expansion. The company raised its full-year forecast, citing a durable top-line recovery and de-risked 2H25 outlook. (Source: company's Q3 2026 Earnings Call Highlights)

1.c. Company Highlights

2. Best Buy's Q3 FY2026 Earnings: A Strong Performance

Best Buy reported strong results for its third quarter fiscal 2026, with revenue of $9.7 billion and an adjusted operating income rate of 4%. The company's comparable sales growth of 2.7% exceeded expectations, driven by strength in computing, gaming, and mobile phones. Adjusted diluted earnings per share increased 11% to $1.40, beating analyst expectations.

Publication Date: Nov -26

📋 Highlights
  • Revenue & EPS Growth: Q3 2026 revenue reached $9.7 billion, with adjusted EPS up 11% to $1.40, driven by strong computing, gaming, and mobile sales.
  • Comparable Sales Momentum: 2.7% YoY comp growth exceeded expectations, led by Windows-based PCs and desktops, though offset by declines in home theater and appliances.
  • Marketplace Expansion: Launched a marketplace with 1,000+ sellers and 11x more SKUs, boosting gross profit rates and contributing to omnichannel growth.
  • Online & International Gains: Online sales grew 3.5% to $2.8 billion, while international revenue rose 6.1% ($794M), driven by 6.3% comp sales growth.
  • Shareholder Returns: Returned $802 million to shareholders YTD (dividends + buybacks), with $300 million allocated for repurchases in 2026.

Segment Performance

The growth was driven by the domestic segment, with revenue increasing 2.1% to $8.9 billion, driven by 2.4% comparable sales growth. Online revenue of $2.8 billion increased 3.5%, while international revenue of $794 million increased 6.1%, primarily driven by 6.3% comparable sales growth. The company's enterprise comparable sales were up 3% in August, 1% in September, and 5% in October, indicating a strong momentum.

Strategic Priorities

Best Buy's strategic priorities for fiscal 2026 include driving omnichannel experiences, building incremental profitability streams, and driving efficiencies. The company has made progress on these priorities, including the launch of its marketplace, which has attracted over 1,000 sellers and offers 11 times more SKUs than before. The marketplace has had a positive impact on the company's gross profit rate, with Corie Barry stating that the goal is to drive a flywheel that feeds all parts of the business.

Outlook and Valuation

For the fourth quarter, the company expects sales growth, driven by growth in computing, gaming, and mobile, as well as trend improvements in TVs. The company expects fourth-quarter comparable sales to be in the range of down 1% to up 1% and adjusted operating income rate of 4.8% to 4.9%. With a P/E Ratio of 26.02 and an EV/EBITDA of 12.67, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 1.3%, which may be challenging given the current valuation multiples.

Dividend and Share Repurchases

The company returned $802 million to shareholders through dividends and share repurchases year-to-date and expects to spend approximately $300 million on repurchases for the year. With a Dividend Yield of 4.76%, the stock may be attractive to income investors. The company's commitment to returning capital to shareholders is a positive sign.

3. NewsRoom

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First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

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Could This Be a Sign That a Big Refresh Cycle in Tech Is Coming?

Dec -03

Source: fool.com

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Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

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Nasdaq, Bitcoin Poised to Recoup Monday's False Start

Dec -02

Source: schaeffersresearch.com

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First Look: Versace deal, crypto slump, WBD bids and Airbus woes

Dec -02

Source: gurufocus.com

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Best Buy Appoints Dylan Jadeja to Board of Directors

Dec -01

Source: businesswire.com

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Choreo LLC Increases Stake in Best Buy Co., Inc. $BBY

Dec -01

Source: defenseworld.net

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Best Buy Co., Inc. $BBY Stake Increased by Boston Partners

Dec -01

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.56%)

6. Segments

Domestic

Expected Growth: 4.5%

The domestic segment of Best Buy Co., Inc. is expected to grow driven by increasing demand for consumer electronics, particularly smart home devices and 5G-enabled products. Additionally, the company's efforts to enhance its online shopping experience and invest in data analytics to personalize customer interactions are expected to contribute to growth.

International

Expected Growth: 5.3%

Best Buy International's growth is driven by increasing demand for consumer electronics, expansion of e-commerce platforms, and strategic partnerships in Canada and Mexico, as well as the company's efforts to enhance customer experience and improve operational efficiency.

7. Detailed Products

TVs and Audio

Best Buy offers a wide range of TVs from top brands like Samsung, LG, and Sony, as well as audio equipment such as soundbars, speakers, and headphones.

Computers and Tablets

Best Buy sells laptops, desktops, and tablets from popular brands like Apple, HP, and Lenovo, along with accessories like keyboards, mice, and cases.

Smartphones

Best Buy offers a variety of smartphones from top brands like Apple, Samsung, and Google, along with accessories like cases, screen protectors, and headphones.

Gaming Consoles

Best Buy sells gaming consoles like PlayStation, Xbox, and Nintendo Switch, along with games, controllers, and accessories.

Appliances

Best Buy offers a range of home appliances like refrigerators, washing machines, and dishwashers from brands like Whirlpool, LG, and Samsung.

Cameras and Camcorders

Best Buy sells cameras, camcorders, and accessories like lenses, tripods, and memory cards from brands like Canon, Nikon, and Sony.

Health and Wellness

Best Buy offers a range of health and wellness products like fitness trackers, smartwatches, and air purifiers from brands like Fitbit, Garmin, and Dyson.

Services

Best Buy provides services like Geek Squad protection plans, installation services, and technical support for various products.

8. Best Buy Co., Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Best Buy faces moderate threat from substitutes as consumers have alternative options for purchasing electronics such as online marketplaces like Amazon, and specialty stores like Apple Stores.

Bargaining Power Of Customers

Best Buy's customers have high bargaining power due to the availability of alternative products and services, which enables them to negotiate prices and demand better services.

Bargaining Power Of Suppliers

Best Buy's suppliers have low bargaining power due to the company's large scale of operations and its ability to negotiate better prices with suppliers.

Threat Of New Entrants

The threat of new entrants is low for Best Buy due to the high barriers to entry in the retail electronics industry, including the need for significant capital investment and established relationships with suppliers.

Intensity Of Rivalry

The retail electronics industry is highly competitive, with Best Buy facing intense rivalry from other retailers such as Walmart, Target, and online marketplaces like Amazon.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.59%
Debt Cost 4.24%
Equity Weight 63.41%
Equity Cost 11.53%
WACC 8.86%
Leverage 57.71%

11. Quality Control: Best Buy Co., Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.17$

Current Price

74.17$

Potential

-0.00%

Expected Cash-Flows