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What changed in Best Buy's 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Best Buy's 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+363 added−364 removedSource: 10-K (2026-03-18) vs 10-K (2024-03-15)

Top changes in Best Buy's 2026 10-K

363 paragraphs added · 364 removed · 262 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn fiscal 2024, we continued our focus on: Caregiver support benefits through Joshin, a support system for employees and their loved ones with a focus on disabilities and neurodivergence; Caregiver support benefits that enable employees to receive personalized help in a time of great need through Wellthy, a program that helps with emergency housing, healthcare, substance abuse, complex eldercare issues and other moments of crisis; Pay continuation (paid leave) and caregiver pay so employees can care for themselves and their loved ones; Parental leave that provides qualifying employees up to 10 weeks at 100% pay; Dedicated support through Included Health, a benefit that connects members to culturally competent providers who understand the unique needs of their community; Access to physical and mental health virtual visits; Emergency assistance through the HOPE Fund – Helping Our People in Emergencies – in equal partnership with the Richard M.
Biggest changeAdditionally, in fiscal 2026, we continued our focus on: • Caregiver support, including: • Access to Joshin, a support system for employees and their loved ones with a focus on disabilities and neurodivergence; • Personalized help in a time of great need through Wellthy, a program that helps with emergency housing, healthcare, substance abuse, complex eldercare issues and other moments of crisis; • Pay continuation (paid leave) and caregiver pay so employees can care for themselves and their loved ones; and • Parental leave for U.S. employees that provides eligible birth parents 100% pay for up to 10 weeks and eligible non-birth parents 100% pay for up to four weeks; • Up to $2,500 in financial assistance to employees experiencing personal hardship through the HOPE Fund – Helping Our People in Emergencies – in partnership with the Richard M.
Employee volunteer programs like Geek Squad Academy spark excitement and interest in technology for young learners, while engaging our employees’ unique technical expertise.
Similarly, our employee volunteer programs, like Geek Squad Academy, spark excitement and interest in technology for young learners while engaging our employees’ unique technical expertise.
Item 1. Business. Unless the context otherwise requires, the terms “we,” “us” and “our” in this Annual Report on Form 10-K refer to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. Any references to our website addresses do not constitute incorporation by reference of the information contained on the websites.
Item 1. Business. Unless the context otherwise requires, the terms “we,” “us,” “our” and the “company” in this Annual Report on Form 10-K refer to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. Any references to our website addresses do not constitute incorporation by reference of the information contained on the websites.
In fiscal 2024, our 20 largest suppliers accounted for approximately 80% of the merchandise we purchased, with five suppliers – Apple, Samsung, HP, Sony and LG – representing approximately 55% of total merchandise purchased.
In fiscal 2026, our 20 largest suppliers accounted for approximately 80% of the merchandise we purchased, with five suppliers – Apple, Samsung, HP, LG and Sony – representing approximately 55% of total merchandise purchased.
Key elements to our inventory management process include the following: continuous monitoring of consumer demand, continuous monitoring and adjustment of inventory receipt levels and pricing, agreements with vendors relating to reimbursement for the cost of markdowns or sales incentives, and agreements with vendors relating to return privileges for certain products.
Key elements to our inventory management process include the following: continuous monitoring of consumer demand and product life cycles, continuous monitoring and adjustment of inventory receipt levels and pricing, agreements with vendors relating to reimbursement for the cost of markdowns or sales incentives, and agreements with vendors relating to return privileges for certain products.
Our ship-from-store capability allows us to offer additional fast and convenient delivery options for customers. Most merchandise is shipped directly from manufacturers to our distribution centers. 4 Suppliers and Inventory Our Domestic and International segments purchase merchandise from a variety of suppliers.
Our ship-from-store capability allows us to offer additional fast and convenient delivery options for customers. Most merchandise is shipped directly from manufacturers to our distribution centers. Distribution is similar for our International segment. Suppliers and Inventory Our Domestic and International segments purchase merchandise from a variety of suppliers.
We also have a global sourcing operation to design, develop, test and contract-manufacture our exclusive brands products. Store Development We had 1,125 stores at the end of fiscal 2024 throughout our Domestic and International segments. Our stores are a vital component of our omnichannel strategy, and we believe they are an important competitive advantage.
We also have a global sourcing operation to design, develop, test and contract-manufacture our exclusive brands products. Store Development We had 1,068 stores at the end of fiscal 2026 throughout our Domestic and International segments. Our stores are a vital component of our omnichannel strategy, and we believe they are an important competitive advantage.
The Nominating, Corporate Governance and Public Policy Committee of our Board of Directors (“Board”) advises and oversees management regarding the effectiveness and risks of our environmental, social and governance strategy, programs and initiatives, including environmental goals and progress, social responsibility programs, initiatives and public policy positions and advocacy.
The Nominating, Corporate Governance and Public Policy Committee of our Board of Directors (“Board”) advises and oversees management regarding the effectiveness and risks of our CR&S strategy, programs and initiatives, including environmental goals and progress, corporate responsibility programs, initiatives and public policy positions and advocacy.
Intellectual Property We own or have the right to use valuable intellectual property such as trademarks, service marks and trade names, including, but not limited to, Best Buy, Best Buy Ads, Best Buy Essentials, Best Buy Health, Best Buy Mobile, CST, Current Health, Dynex, Geek Squad, Insignia, Jitterbug, Lively, Magnolia, Modal, My Best Buy, Pacific Kitchen and Home, Pacific Sales, Platinum, Rocketfish , TechLiquidators , Yardbird and our Yellow Tag logo.
Intellectual Property We own or have the right to use valuable intellectual property such as trademarks, service marks and trade names, including, but not limited to, Best Buy, Best Buy Ads , Best Buy Business, Best Buy Essentials, Best Buy Express, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Jitterbug, Lively, Magnolia, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, Pacific Sales, Rocketfish, TechLiquidators , Yardbird and our Yellow Tag logo.
These documents are posted on our website at https://investors.bestbuy.com. Copies of any of the above-referenced documents will also be made available, free of charge, upon written request to Best Buy Co., Inc. Investor Relations Department at 7601 Penn Avenue South, Richfield, MN 55423-3645.
These documents are posted on our website at https://investors.bestbuy.com. Copies of any of the above-referenced documents will also be made available, free of charge, upon written request to Best Buy Co., Inc.
The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, currenthealth.com, lively.com, techliquidators.com and yardbird.com.
The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Lively, Jitterbug, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, lively.com, techliquidators.com and yardbird.com.
The Compensation and Human Resources Committee of our Board supports the development of an inclusive and diverse culture through oversight of our human resources policies and program. The Nominating, Corporate Governance and Public Policy Committee of our Board recommends criteria for the selection of individuals to be considered as candidates for election to the Board.
Our Executive Leadership Team and Compensation and Human Resources Committee of our Board supports the development of a culture of belonging and engagement through oversight of our human resources policies and programs. The Nominating, Corporate Governance and Public Policy Committee of our Board recommends criteria for the selection of individuals to be considered as candidates for election to the Board.
Our culture is built on the belief that engaged and committed employees – supported by opportunities to learn, grow, innovate and explore – can lead to extraordinary outcomes . At the end of fiscal 2024, we employed more than 85,000 employees in the U.S. and Canada .
Human Capital Management We believe in the power of our people. Our culture is built on the belief that engaged and committed employees – supported by opportunities to learn, grow, innovate and explore – can lead to extraordinary outcomes. At the end of fiscal 2026, we employed approximately 82,000 employees in the U.S. and Canada.
While day-to-day operations of our stores are led by store management, more strategic decisions regarding, for example, store locations, format, category assortment and fulfillment strategy, are led by our corporate teams with input from market or regional leadership.
All stores generally operate under standard procedures with a degree of flexibility for store management to address certain local market characteristics. While day-to-day operations of our stores are led by store management, more strategic decisions regarding, for example, store locations, format, category assortment and fulfillment strategy, are led by our corporate teams with input from market or regional leadership.
The key components of each revenue category are as follows: Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches); Consumer Electronics - digital imaging, health and fitness products, home theater (including home theater accessories, soundbars and televisions), portable audio (including headphones and portable speakers) and smart home; Appliances - large appliances (including dishwashers, laundry, ovens and refrigerators) and small appliances (including blenders, coffee makers, vacuums and personal care); Entertainment - drones, gaming (including hardware, peripherals and software), movies, toys, virtual reality and other software; Services - delivery, health-related services, installation, memberships, repair, set-up, technical support and warranty-related services; and Other - other product offerings, including baby, food and beverage and outdoor living.
The key components of each revenue category are as follows: • Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches); • Consumer Electronics - digital imaging, health and fitness products, home theater (including home theater accessories, soundbars and televisions), portable audio (including headphones and portable speakers) and smart home; • Appliances - large appliances (including dishwashers, laundry, ovens and refrigerators) and small appliances (including blenders, coffee makers, vacuums and personal care); • Entertainment - drones, gaming (including hardware, peripherals and software, as well as augmented reality glasses), toys, virtual reality and other software; • Services - advertising, delivery, health-related services, installation, marketplace commissions, memberships, repair, set-up, technical support, warranty-related services; and • Other - other product offerings, including baby, food and beverage and outdoor living. 4 Table of Contents Distribution Customers within our Domestic segment who purchase product online have the choice to have product delivered, or pick up product from a Best Buy store (including curbside pick-up for many products at most stores) or an alternative pick-up location.
Best Buy also serves as a fiscal sponsor of the Best Buy Foundation™, whose signature Best Buy Teen Tech Center® program consists of a network of youth-centered community hubs where teens can engage with the latest technology, learn career skills, and interact with safe and supportive mentors.
Best Buy serves as a fiscal sponsor of the Best Buy Foundation™, whose Best Buy Teen Tech Center® program consists of a network of youth-centered community hubs where young people can connect with the latest technology, learn career skills and engage with supportive mentors in safe environments to ensure young people are prepared for the demands of today's economy.
We believe the following focus areas will help to reduce the use of natural resources and our impact on the environment while improving our efficiency and profitability: In our ongoing efforts to reduce carbon emissions in our operations, we support energy efficiency programs, including investments in energy efficiency improvements, deploying small-scale onsite and utility-scale renewable energy systems and neutralizing residual emissions. We monitor our water consumption across our business to identify and manage programs that lessen our dependence on water. To reduce waste and maximize resource efficiency, we continue our efforts to build a more sustainable supply chain by focusing on certifying our warehousing operations as TRUE zero waste.
We believe the following focus areas help to reduce the use of natural resources and our impact on the environment while improving our efficiency and profitability: • We aim to reduce our carbon emissions by minimizing energy usage, advocating for a cleaner grid and sourcing renewable energy. • We monitor our water consumption across our business to identify and manage programs that lessen our dependence on water. • To reduce waste and maximize resource efficiency, we continue to develop a more sustainable supply chain by certifying our supply chain locations under the TRUE zero waste program.
Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Mobile and Geek Squad and the domain name bestbuy.ca. Operations Our Domestic and International segments are managed by leadership teams responsible for all areas of the business.
Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Express, Best Buy Marketplace, Best Buy Mobile, Geek Squad, Insignia and TechLiquidators and the domain names bestbuy.ca and techliquidators.ca.
In addition, we have price-matching policies that allow customers to request that we match a price offered by certain retail stores and online operators. In order to allow this, we are focused on maintaining efficient operations and leveraging the economies of scale available to us through our global vendor partnerships.
In order to allow this, we are focused on maintaining efficient operations and leveraging the economies of scale available to us through our global vendor partnerships.
This website and the report are not part of this Annual Report on Form 10-K and are not incorporated by reference herein. 7 Available Information We are subject to the reporting requirements of the Exchange Act and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the U.S.
Available Information We are subject to the reporting requirements of the Exchange Act and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the U.S. Securities and Exchange Commission (“SEC”).
For more information on environmental and social matters, as well as human capital management, please see Best Buy’s Fiscal 2024 Corporate Responsibility and Sustainability Report expected to be published later this year, at https://corporate.bestbuy.com/sustainability.
For more information on CR&S matters, as well as human capital management, please see Best Buy’s Fiscal 2026 Corporate Responsibility and Sustainability Report expected to be published later this year, at https://corporate.bestbuy.com/reports-and-resources. This website and the report are not part of this Annual Report on Form 10-K and are not incorporated by reference herein.
We believe our dedicated and knowledgeable people; our integrated online, retail and in-home assets; our broad and curated product assortment; our strong vendor partnerships; our service and support offerings designed to solve real customer needs; our unique ability to showcase technology in distinct store formats; and our supply chain are important ways in which we maintain our competitive advantage. 5 Environmental and Social As we pursue our purpose to enrich lives through technology, we are committed to having a positive impact on the world, the environment and the communities in which we operate through interactions with all of our stakeholders, including our customers, employees, vendor partners, community partners and shareholders.
We believe our dedicated and knowledgeable people; our integrated online, retail and in-home assets; our broad and curated product assortment; our strong vendor partnerships; our service and support offerings designed to solve customer needs; our unique ability to showcase technology in distinct store formats; and our supply chain are important ways in which we maintain our competitive advantage.
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.
Investor Relations Department at 7601 Penn Avenue South, Richfield, MN 55423-3645. 8 Table of Contents 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.
Our focus on sustainable products is centered on helping our customers reduce their impact on the environment through the products we sell. We do this by providing a variety of energy-efficient products to our customers. We also support the circular economy by keeping consumer products in use for as long as possible through our repair and trade-in services.
Our focus on sustainable products centers on energy efficiency. By assorting and promoting a broad range of energy-efficient electronics and appliances, we help customers reduce their environmental impact and energy costs throughout the life of the product. We support the circular economy by keeping consumer products in use for as long as possible through our repair and trade-in services.
We put materials back into the manufacturing process when products reach the end of their lives through our electronics and appliance recycling program. Social Human Rights and Responsible Sourcing We are committed to respecting and advancing human rights through our alignment with the United Nations Guiding Principles on Business and Human Rights.
We put materials back into the manufacturing process when products reach the end of their lives through our electronics and appliance recycling program.
Environmental We are committed to propelling the circular economy forward, a system that aims to reduce waste and preserve resources. We focus on our highest-impact areas, including in our operations, through the energy we procure and through the products we sell. In our operations, we strive to reduce the use of natural resources.
Environmental We aspire to drive forward the circular economy, a system that aims to reduce waste and preserve resources. We focus on our highest-impact areas, including our operations, the energy we procure and the products we sell. These efforts contribute to mitigating climate risks, reducing potential risks to our business and generating long-term cost savings.
Both segments operate an omnichannel platform that allows customers to come to us online, visit our stores or invite us into their homes. Development of merchandise and service offerings, pricing and promotions, procurement and supply chain, online and mobile application operations, marketing and advertising and labor deployment across all channels are centrally managed.
Operations Our Domestic and International segments are managed by leadership teams responsible for all areas of the business. Both segments operate an omnichannel platform that allows customers to come to us online, visit our stores or invite us into their homes.
Our retail stores have procedures for inventory management, asset protection, transaction processing, customer relations, store administration, product sales and services, staff training and merchandise display that are largely standardized. All stores generally operate under standard procedures with a degree of flexibility for store management to address certain local market characteristics.
We also have field operations that support retail, services and in-home teams primarily from our corporate headquarters and regional locations. Our retail stores have procedures for inventory management, asset protection, transaction processing, customer relations, store administration, product sales and services, staff training and merchandise display that are largely standardized.
Further, across all the products and services we procure, we seek to enhance our partnership with suppliers and create value for all stakeholders through our Responsible Sourcing Program. We are active members of the Responsible Business Alliance, which allows us to partner with many of the brands we sell, including Apple, Intel, Microsoft and Samsung.
Human Rights and Responsible Sourcing We are committed to respecting human rights through our alignment with the United Nations Guiding Principles on Business and Human Rights. Further, across the products and services we procure, we seek to mitigate risk and enhance our partnership with suppliers and create value for all stakeholders through our Responsible Sourcing Program.
Competition Our competitors are primarily multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers who offer their products and services directly to customers. We believe our ability to help customers online, in our stores and in their homes, and to connect technology product and solutions with customer needs, provide us key competitive advantages.
Our working capital needs typically increase in the months leading up to the holiday shopping season as we purchase inventory in advance of expected sales. 5 Table of Contents Competition Our competitors are primarily multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers who offer their products and services directly to customers.
Some of our competitors have lower cost operating structures and seek to compete for sales primarily on price. We carefully monitor pricing offered by other retailers and service providers, as maintaining price competitiveness is one of our ongoing priorities.
We carefully monitor pricing offered by other retailers and service providers, as maintaining price competitiveness is one of our ongoing priorities. In addition, we have price-matching policies that allow customers to request that we match a price offered by certain retail stores and online operators.
In addition, our revolving credit facilities are available for additional working capital needs, for general corporate purposes, investments and growth opportunities. Our working capital needs typically increase in the months leading up to the holiday shopping season as we purchase inventory in advance of expected sales.
In addition, our revolving credit facility is available for additional working capital needs, for general corporate purposes, investments and growth opportunities.
Collectively, we embrace a common Supplier Code of Conduct and audit methodology that seeks to improve working and environmental conditions in the supply chain. Community Impact Best Buy is committed to helping prepare teens from disinvested communities for the tech-reliant careers of the future.
Collectively, we embrace a common Supplier Code of Conduct and audit methodology that creates business value by improving working conditions and environmental practices throughout the supply chain. 6 Table of Contents Social Impact We are committed to helping young people build brighter futures by preparing them to enter quality tech-reliant careers of the future.
Schultze Family Foundation, providing employees in hardship situations an opportunity to receive up to $2,500 in financial assistance; Mental health, including our commitment to raise awareness about mental health, equipping employees with training to notice issues in themselves or others, and then find help; and Tuition assistance, including the expansion of our partnership schools giving eligible employees the opportunity to earn a degree with no out-of-pocket costs.
Schulze Family Foundation; and • Mental health support, including our commitment to raise awareness by equipping employees with training to notice issues in themselves or others, and then find help.
In addition, support capabilities (for example, human resources, finance, information technology and real estate management) operate from our corporate headquarters. We also have field operations that support retail, services and in-home teams from our corporate headquarters and regional locations.
Development of merchandise and service offerings, pricing and promotions, procurement and supply chain, online and mobile application operations, marketing and advertising and labor deployment across all channels are centrally managed. In addition, support capabilities (for example, human resources, finance, information technology and real estate management) operate primarily from our corporate headquarters.
Training and Development We continue to invest in our employees and their skill development to enable customized learning experiences. This helps to create a more adaptable and resilient workforce and enhances our competitive advantage. With the continued goal of personalizing learning opportunities, we transitioned to offering new types of training experiences in fiscal 2024.
Training and Development We continue to invest in our employees and build a culture focused on developing our talent. Prioritizing foundational and leadership skill development helps to meet employees where they are at, which creates a more adaptable and resilient workforce and enhances our competitive advantage.
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Our Best Buy Health business has a dedicated leadership team that manages the day-to-day affairs of all aspects of its business, while receiving support from certain Best Buy enterprise capabilities. Merchandise and Services Our Domestic and International segments have offerings in six revenue categories.
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Merchandise and Services Our Domestic and International segments have offerings in six revenue categories.
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Distribution Customers within our Domestic and International segments who purchase product online have the choice to pick up product at a Best Buy store (including curbside pick-up for many products at most Domestic stores) or at an alternative pick-up location or take delivery direct to their residence or place of business.
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We believe our ability to help customers online, in our stores and in their homes, and to connect technology product and solutions with customer needs, provide us key competitive advantages. Some of our competitors have lower cost operating structures and seek to compete for sales primarily on price.
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Refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, for tables reconciling our Domestic and International segment stores open at the end of each of the last three fiscal years.
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Corporate Responsibility & Sustainability ("CR&S") As we pursue our purpose to enrich lives through technology, we are committed to creating shared long-term value and positively impacting the world, the environment and the communities in which we operate through interactions with our stakeholders, including our customers, employees, vendor partners, community partners and shareholders.
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As of February 3, 2024, the Best Buy Foundation™ supported a network of 59 Best Buy Teen Tech Center® locations across the U.S. and Canada, working toward a goal of supporting 100 locations. 6 Human Capital Management We believe in the power of our people.
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In our operations, we strive to reduce the use of natural resources.
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Inclusion, Diversity and Equity We are proud and encouraged by what we have accomplished collectively to expand inclusion, diversity and equity at Best Buy over the past few years.
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Since launching our nationwide e-waste recycling program in 2008, we have continued to expand our industry leading efforts, and in fiscal 2026, we introduced new financial incentives, continued convenient mail-back options and enhanced home haul-away services to make recycling easier and more rewarding.
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Now we are evolving our strategic focus to advance four specific outcomes:  Employee Engagement: We want Best Buy employees to feel connected to the company’s values, vision and purpose, and have opportunities to thrive.  Retention: Best Buy seeks to establish and uphold a best-in-class retention approach across all demographics.  Representation: We aim to provide Best Buy employees from diverse backgrounds with equal opportunities at all levels in the organization.  Culture of Belonging: Best Buy endeavors to foster an environment where employees feel welcomed and can build strong relationships through demonstrating our inclusive behaviors: vulnerability, empathy, courage and grace.
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We are active members of the Responsible Business Alliance, as are many of the major brands we sell, which allows us to partner across initiatives and increase our impact.
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This included side-by-side trainings, enabling employees to learn and grow alongside their peers and leaders in condensed training formats. Examples of enhancements include:  We evolved the onboarding experience, optimizing this for new employees.
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We are refreshing our community commitments to focus on creating economic opportunity for young people as they chart their path from education to employment. This includes working with a community of like-minded employers moving beyond traditional hiring models, valuing skills over credentials to build a dynamic, resilient workforce.
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We also created new, consistent onboarding experiences in our supply chain, services teams, call centers and project teams.  We built an internal program to apply industry-leading learning methodologies and focused on building enterprise leaders who are more equipped to lead through times of uncertainty and change, while growing and transforming Best Buy for the future.
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Inclusion and Belonging We believe in a culture of belonging where everyone feels valued, can thrive and has equal opportunities at all levels in the organization. At the core of this inclusive environment are our company values, which were founded decades ago.
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Employee Benefits Our benefits aim to support employees’ overall well-being.
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One of our values – unleash the power of our people – emphasizes that everyone can learn, grow and be the best version of themselves. We believe that creating this environment is the right thing to do and has been key to our long-term business success.
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We believe that by investing in employee training and development, we can create a better employee environment and increase productivity, retention and innovation that ultimately improves our overall company performance and brings value to stakeholders.
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With the continued goal of creating learning opportunities that are tailored to the unique work of each role and a focus on solving the most important problems in our business, we expanded our variety of training experiences in fiscal 2026. Examples of enhancements include: • We evolved our leadership development offerings to grow and transform Best Buy for its future.
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This included the LEAD Leadership Development program designed for corporate, supply chain and retail leaders, and expanding the Leadership Essentials program to build core leadership capabilities that help employees grow and succeed in leadership roles. • We continued to invest in career growth and development for our employees through the Best Buy Altitude program, allowing leaders to develop their leadership skills and prepare for their next role, creating a talent bench behind high impact roles. • We supported strategic business teams through focused functional learning by delivering structured onboarding, building training for new processes and systems, and providing targeted leadership development to enable growth and cultural transformation. • We hosted a “Culture Weekend” with trained onboarding captains to train and prepare our seasonal workforce, while simultaneously helping foster a sense of belonging, connect staff and celebrate our company culture and values. • We enhanced our portfolio of risk, compliance and safety training and awareness initiatives to enable employees to continuously develop safe, secure and ethical behaviors to protect the company. 7 Table of Contents Employee Benefits Our benefits aim to support employees’ overall well-being: physical, mental, financial and work-life.
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We believe our ability to deliver on our purpose of enriching our customers’ lives through technology depends on ensuring our employees are living happy and healthy lives — both while at work and outside of work.
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In fiscal 2026, we introduced the following benefits to our employees: • A Recognition Program providing peer-to-peer and leader recognition called Applause, allowing employees to be recognized for behaviors based on our company values. • Enhanced Years of Service recognition, introducing new award options for completing 30 years of service, a lifetime employee discount after 35 years and a fully-paid sabbatical after 40 years. • No Cost-No Debt College Degrees program for eligible full-time and part-time employees to supplement our existing tuition assistance and tuition discount programs. • New features of our Employee Assistance Program, including Well-being Assessments, Well-being Coaching and an increased number of covered counseling sessions.
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Some of the information distributed through this channel may be considered material information.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the most significant compliance and litigation risks we face include, but are not limited to: the difficulty of complying with sometimes conflicting statutes and regulations in local, national or international jurisdictions; the potential for unexpected costs related to compliance with new or existing environmental legislation or international agreements affecting energy, carbon emissions, electronics recycling and water or product materials; the challenges of ensuring compliance with applicable product compliance laws and regulations with respect to both the products we sell and the products we contract to manufacture, including laws and regulations related to product safety and product transport; the financial, operational and business impact of evolving regulations governing data privacy and security, including limitations on the collection, use or sharing of information; consumer rights to access, delete or limit/opt-out of the use of information; or litigation arising from new private rights of action; the impact of other new or changing statutes and regulations including, but not limited to, financial reform; National Labor Relations Board rule changes; healthcare reform; contracted worker labor laws; corporate governance matters; escheatment rules; rules governing pricing, content, distribution, copyright, mobile communications, AI deployment or usage, electronic device certification or payment services; and/or other future legislation that could affect how we operate and execute our strategies as well as alter our expense structure; the impact of litigation, including class-action lawsuits involving consumers and shareholders and labor and employment matters; the possibility of a federal ban on arbitration clauses in consumer and/or employee contracts, which could increase costs of dispute resolution; and the impact of changes in the federal executive and legislative branches on the development, or changes in, laws, regulations and policies, such as economic, fiscal, tax, retail, labor and social policies.
Biggest changeSome of the most significant compliance and litigation risks we face include, but are not limited to: • the difficulty of complying with sometimes conflicting statutes, regulations and executive orders in local, national and international jurisdictions; • the potential for incremental costs related to compliance with new or existing environmental legislation or international agreements affecting greenhouse gas emissions, electronics recycling, water usage or product materials; • the challenges of ensuring compliance with applicable product laws and regulations, including laws and regulations related to product safety, product transport and product disposal, as well as laws and regulations related to the products sold by us or by Best Buy Marketplace sellers and the products we contract to manufacture; • increased legal and regulatory exposure resulting from new and expanding business areas (e.g., Best Buy Marketplace and Best Buy Ads), especially the potential impact of the unsettled legal landscape relating to third-party marketplaces and retail media networks; • the impact of evolving regulations governing data privacy and security, including limitations on the collection, use or sharing of information, consumer rights to access, delete or limit/opt-out of the use of information, and litigation arising from new private rights of action; • the potential lingering residual obligations due to the divestment of certain health-related services in fiscal 2026; • the impact of other new or changing statutes and regulations that may require changes to our compliance programs and attendant costs of those programs; • the challenges of ensuring compliance with applicable labor and employment laws, including: laws governing the organization of unions and related rules that affect the nature of labor relations, which are frequently modified by the National Labor Relations Board; laws that impact the relationship between the company and independent contractors and the classification of employees and independent contractors; laws regarding non-discrimination and related issues; and wage and hour laws, such as minimum wage, sick time scheduling, paid leave and non-compete covenants; • the challenges arising from regulatory lags in addressing and adapting to rapid AI advancements; • the impact of litigation and dispute resolution, including class-action lawsuits involving consumers, shareholders and labor and employment matters, mass arbitration, pricing claims, and potential changes to arbitration rules that could increase costs; and • the impact of regulatory and legislative uncertainty, such as changing U.S., state or other countries’ tax laws and regulations or evolving interpretations of existing tax laws, shifting federal policies, and an increasingly fragmented patchwork of federal and state regulations.
These factors manifest in a variety of ways: the emergence of new products and categories, the rapid maturation of categories, cannibalization of categories, changing price points and product replacement and upgrade cycles. 9 This rapid pace of change can be hard to predict and manage .
These factors manifest in a variety of ways: the emergence of new products and categories, the rapid maturation of categories, cannibalization of categories, changing price points, and product replacement and upgrade cycles. This rapid pace of change can be hard to predict and manage.
Item 1A. Risk Factors. Described below are certain risks we believe apply to our business and the industry in which we operate. The risks are categorized using the following headings: external, strategic, operational, regulatory and legal, and financial and market.
Item 1A. Risk Factors. Described below are certain risks we believe apply to our business and the industry in which we operate. The risks are categorized using the following headings: external, strategic, operational, regulatory, compliance and legal, and financial and market.
Our future liquidity will depend on a variety of factors, such as economic and market conditions, the regulatory environment for and financial stability of banks and other financial institutions, the availability of credit, our credit ratings and our reputation with potential lenders.
Our future liquidity will depend on a variety of factors, such as economic and market conditions, the regulatory environment and financial stability of banks and other financial institutions, the availability of credit, our credit ratings and our reputation with potential lenders.
Our profitability depends on securing acceptable terms with our vendors for, among other things, the price of merchandise we purchase from them, funding for various forms of promotional programs, payment terms, allocations of merchandise, development of compelling assortments of products, operation of vendor-focused shopping experiences within our stores and terms covering returns and factory warranties.
Our profitability depends on securing acceptable terms with our vendors for, among other things, the price of merchandise we purchase from them, funding for various forms of promotional programs, payment terms, allocations of merchandise, development of compelling assortments of products, data sharing terms, operation of vendor-focused shopping experiences within our stores and terms covering returns and factory warranties.
Adverse changes to any of these factors could impair our ability to offer these programs to customers and reduce customer purchases and our ability to earn income from sharing in the profits of the programs. 17 Constraints in the capital markets or our vendor credit terms may have a material adverse impact on our liquidity.
Adverse changes to any of these factors could impair our ability to offer these programs to customers and reduce customer purchases and our ability to earn income from sharing in the profits of the programs. Constraints in the banking and capital markets or our vendor credit terms may have a material adverse impact on our liquidity.
While we have adopted, and continue to enhance, business continuity and disaster recovery plans and strategies, there is no guarantee that such plans and strategies will be effective, which could interrupt the functionality of our information technology systems or those of third parties.
While we have adopted, and continue to enhance, business continuity and disaster recovery plans and strategies, there is no guarantee that such plans and strategies will be effective, which in turn could interrupt the functionality of our information technology systems or those of third parties.
Some elements of our costs may be higher than our competitors’ because of, for example, our extended retail footprint and structure, our hourly pay structure, our differentiated service offerings or our levels of customer service. Accordingly, our ongoing drive to reduce costs and increase efficiency represents a strategic imperative.
Some elements of our costs may be higher than our competitors’ because of, for example, our extended retail footprint and structure, our hourly pay structure, our differentiated service offerings or our level of customer service. Accordingly, our ongoing drive to reduce costs and increase efficiency represents a strategic imperative.
Furthermore, because the methods used to obtain unauthorized access change frequently and may not be immediately detected, and given the potentially disruptive nature of emerging technologies (including AI), we may be unable to anticipate such attacks or promptly and effectively respond to them.
Furthermore, because the methods used to obtain unauthorized access change frequently and may not be immediately detected, and given the potentially disruptive nature of emerging technologies, we may be unable to anticipate such attacks or promptly and effectively respond to them.
A significant portion of our expenses and investments are fixed, and we may not be able to adjust our spending quickly enough if our sales are less than expected. Our revenue growth may not be sustainable and our percentage growth rates may decrease.
A significant portion of our expenses and investments are fixed, and we may not be able to adjust our spending quickly enough if our sales are less than expected. Our revenue growth may not be predictable or sustainable, and our percentage growth rates may decrease.
While we believe we offer capabilities that these vendors value and depend upon to varying degrees, our vendors may be able to leverage their competitive advantages for example, their own stores or online channels, their financial strength, the strength of their brands with customers or their relationships with other retailers to our commercial disadvantage.
While we believe we offer capabilities that these vendors value and depend upon to varying degrees, our vendors may be able to leverage their competitive advantages — for example, their own stores or online channels, their financial strength, the strength of their brands with customers or their relationships with other retailers — to our detriment.
We engage key third-party business partners to support various functions of our business, including, but not limited to, delivery and installation, customer warranty, information technology, web hosting and cloud-based services, customer loyalty programs, promotional financing and customer loyalty credit cards, gift cards, technical support, transportation, insurance programs and human resource operations.
We engage key third-party business partners to support various functions of our business, including delivery and installation, customer warranty, information technology, web hosting and cloud-based services, customer loyalty programs, promotional financing and customer loyalty credit cards, gift cards, technical support, transportation, insurance programs and human resource operations.
We believe our financing programs generate incremental revenue from customers who prefer the financing terms to other available forms of payment or otherwise need access to financing in order to make purchases. Approximately 25 % of our fiscal 2024 Domestic revenue was transacted using one of the company’s branded cards.
We believe our financing programs generate incremental revenue from customers who prefer the financing terms to other available forms of payment or otherwise need access to financing in order to make purchases. Approximately 25% of our fiscal 2026 Domestic segment revenue was transacted using one of the company’s branded cards.
As a result, unauthorized parties may obtain access to our data systems and misappropriate company, employee, third party or customer information, or authorized parties may use or share personal information in an inappropriate manner or otherwise seek to extract financial gain based on access to, or possession of, company, employee or customer information.
As a result, unauthorized parties may obtain access to our data systems and misappropriate company, employee, third-party or customer information, authorized parties may use or share personal information in an inappropriate manner, or bad actors may otherwise seek to extract financial gain based on access to, or possession of, company, employee, customer or vendor information.
Our actual results may not be in line with guidance we have provided. We may not be able to accurately forecast our growth rate and profit margins. We base our expense levels and investment plans on sales estimates.
Our actual results may not be in line with guidance we have provided. We may not be able to accurately forecast our growth rate and profitability. We base our expense levels and investment plans on sales estimates.
The turnover rate in the retail sector is relatively high and there is an ongoing need to recruit and train new employees.
The turnover rate in the retail sector is relatively high, creating an ongoing need to recruit and train new employees.
Our revenue and operating profit growth depend on the continued growth of demand for the products and services offered by us, and our business is affected by general economic and business conditions worldwide.
Our revenue and profitability depend on the continued growth of demand for the products and services offered by us, and our business is affected by general economic and business conditions worldwide.
As these and related competitive factors evolve, we may experience material adverse pressure on our revenue and profitability. If we fail to attract, retain and engage qualified employees, our operations and profitability may be negatively impacted. In addition, changes in market compensation rates could adversely affect our profitability.
As these and related competitive factors evolve and progress, we may experience material adverse pressure on our revenue and profitability. 11 Table of Contents If we fail to attract, retain and engage qualified employees, our operations and profitability may be negatively impacted. In addition, changes in market compensation rates could adversely affect our profitability.
As a consequence of these or other catastrophic events, we may experience interruption to our operations or losses of property, equipment and/or inventory, which could adversely affect our revenue and profitability. Many of the products we sell are highly susceptible to technological advancement, product life cycle fluctuations and changes in consumer preferences.
As a consequence of these catastrophic events, we may experience interruptions to our operations or losses of property, equipment and/or inventory, which could adversely affect our revenue and profitability. 10 Table of Contents Many of the products we sell are highly susceptible to technological advancement, product life-cycle fluctuations and changes in consumer preferences.
The ubiquity of social media means that customer feedback and other information about our company are shared with a broad audience in a manner that is easily accessible and rapidly disseminated.
The ubiquity of social media means that customer feedback and other information about our company, which may include fictitious information, are shared with a broad audience in a manner that is easily accessible and rapidly disseminated.
These initiatives and goals within the scope of CRS could be difficult and expensive to implement, the technologies needed to implement them may not be cost-effective and may not advance at a sufficient pace and we could be criticized for the accuracy, adequacy or completeness of the disclosure.
These initiatives and goals within the scope of CR&S could be difficult and expensive to implement, the technologies needed to implement them may not be cost-effective and may not advance at a sufficient pace and we could be criticized for the accuracy, adequacy or completeness of the disclosures.
Failure to take appropriate actions in relation to product-related issues (for example, product recalls), could lead to violations of laws and regulations and leave us susceptible to government enforcement actions or private litigation.
Failure to take appropriate actions in relation to product-related issues (e.g., product recalls) could lead to violations of laws and regulations and leave us susceptible to government enforcement actions or private litigation.
We rely heavily on these information technology systems to manage all key aspects of our business, including demand forecasting, purchasing, supply chain management, point-of-sale processing, services fulfillment (including, for example, our Urgent Response service provided by Best Buy Health), staff planning and deployment, financial management, reporting and forecasting and safeguarding critical and sensitive information.
We rely heavily on these information technology systems to manage all key aspects of our business, including demand forecasting, purchasing, supply chain management, transaction processing, fulfillment of products and services (including, for example, our urgent response and care center services provided by Best Buy Health), staff planning and deployment, financial management, reporting and forecasting and safeguarding critical and sensitive information.
If we fail to interpret, predict and react to these changes in a timely and effective manner, the consequences may include, but are not limited to: failure to offer the products and services that our customers want; excess inventory, which may require heavy discounting or liquidation; inability to secure adequate access to brands or products for which consumer demand exceeds supply; delays in adapting our merchandising, marketing or supply chain capabilities to accommodate changes in product trends; and damage to our brand and reputation.
If we fail to interpret, predict and react to these changes in a timely and effective manner, the consequences may include, but are not limited to: • failure to offer, or inability to secure an adequate supply of, the products and services that our customers want; • excess inventory, which may require heavy discounting, liquidation or storage; • delays in adapting our merchandising, marketing or supply chain capabilities to accommodate changes in product trends; and • damage to our brand and reputation.
In addition, we earn profit-share income and share in any losses from some of our banking partners based on the performance of the programs. Profit-sharing revenue from our credit card arrangement approximated 1.4% of Domestic revenue in fiscal 2024.
In addition, we earn profit-share income and share in any losses from some of our banking partners based on the performance of the programs. Profit-sharing revenue from our credit card arrangement approximated 1.2% of Domestic segment revenue in fiscal 2026.
We offer promotional financing and credit cards issued by third-party banks that manage and directly extend credit to our customers. Customers choosing promotional financing can receive extended payment terms and low- or no-interest financing on qualifying purchases.
In partnership with third parties, we offer promotional financing as well as credit cards issued by third-party banks that manage and directly extend credit to our customers. Customers choosing promotional financing can receive extended payment terms and low- or no-interest financing on qualifying purchases.
Our International operations expose us to additional risks, including those related to, for example: political conditions and geopolitical events, including war and terrorism; economic conditions, including monetary and fiscal policies and tax rules, as well as foreign exchange rate risk; rules governing international trade and potential changes to trade policies or trade agreements and ownership of foreign entities; government-imposed travel restrictions or warnings and differing responses of governmental authorities to pandemics and other global events; cultural differences that we may be unable to anticipate or respond to appropriately; different rules or practices regarding employee relations, including the existence of works councils or unions; difficulties in enforcing intellectual property rights; and difficulties encountered in exerting appropriate management oversight to operations in remote locations.
In addition to the risk factors identified throughout, our international operations could be impacted by additional risks, including: • political conditions, diplomatic relationships and alliances and geopolitical events, including war and terrorism; • economic conditions, including monetary and fiscal policies and tax rules, as well as foreign exchange rate risk; • rules governing international trade and potential changes to trade policies or trade agreements and ownership of foreign entities; • government-imposed travel restrictions or warnings and differing responses of governmental authorities to pandemics and other global events; • cultural differences that we may be unable to anticipate or respond to appropriately; • different rules or practices regarding employee relations, including the existence of works councils or unions; • difficulties in enforcing intellectual property rights; and • difficulties encountered in exerting appropriate management oversight to operations in remote locations.
Our focus on services exposes us to certain risks that could have a material adverse impact on our revenue, profitability and reputation. We offer a full range of services that complement our product offerings, including consultation, delivery, design, installation, memberships, protection plans, repair, set-up, technical support and health, safety and caregiving monitoring and support.
Our focus on services exposes us to certain risks that could have a material adverse impact on our revenue, profitability and reputation. We offer a full range of services that complement our product offerings, including consultation, delivery, health-related services, installation, memberships, repair, set-up, technical support and warranty-related services.
If our efforts to protect against such compromises and ensure appropriate handling of customer data on devices we manufacture, sell and service are not effective, this may result in potential liability and damage to our customer relationships.
If our efforts to protect against such compromises and reasonably ensure appropriate handling of customer data on devices we manufacture, sell or service are not effective, we may incur potential liability and damage to our customer relationships.
In fiscal 2024, our 20 largest suppliers accounted for approximately 80% of the merchandise we purchased, with five suppliers – Apple, Samsung, HP, Sony and LG - representing approximately 55 % of total merchandise purchased. We generally do not have long-term written contracts with our vendors that would require them to continue supplying us with merchandise.
In fiscal 2026, our 20 largest suppliers accounted for approximately 80% of the merchandise we purchased, with five suppliers – Apple, Samsung, HP, LG and Sony – representing approximately 55% of total merchandise purchased. Our contracts with vendors generally do not require them to continue supplying us with merchandise.
Unexpected events or developments, such as pandemics, natural or man-made disasters, changes in consumer demand, economic factors, product sourcing issues, cyber-attacks, failure or interruption of management information systems, or disruptions in services or systems provided or managed by third-party vendors could significantly disrupt our operations.
Unexpected events or developments, such as pandemics, natural or man-made disasters, changes in consumer demand and spending, economic factors, product sourcing issues, AI developments, cyber-attacks, failure or interruption of management information systems, or disruptions in services or systems provided or managed by third-party vendors could significantly disrupt our operations, especially during the fiscal fourth quarter.
All forward-looking statements made by us or on our behalf are qualified by the risks described below. External Risks Macroeconomic pressures, including, but not limited to, the current geopolitical climate, may adversely affect consumer spending and our financial results. To varying degrees, our products and services are sensitive to changes in macroeconomic conditions that impact consumer spending.
All forward-looking statements made by us or on our behalf are qualified by the risks described below. External Risks Macroeconomic pressures may adversely affect consumer spending and our financial results. To varying degrees, our products and services are sensitive to changes in macroeconomic conditions.
The integration of AI into our operations increases cybersecurity and privacy risks (including unauthorized or misuse of AI tools) and could lead to potential unauthorized access, misuse, acquisition, release, disclosure, alteration or destruction of company and customer data or other confidential or proprietary information and challenge the stability of our platforms.
The integration of AI into our operations introduces cybersecurity and privacy risks (including unauthorized or misuse of AI tools) and could lead to potential unauthorized access, use, acquisition, release, disclosure, alteration or destruction of personal or confidential information or challenge the stability of our platforms.
In addition, our carriers may also serve customers through their own stores, websites, mobile applications and call centers or through other competing retail channels. Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition through a focus on consumer experience.
In addition, our carriers may also serve customers through their own stores, websites, mobile applications and call centers or through other competing retail channels. Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition. We operate a portfolio of brands with a commitment to customer service and innovation.
While we engage in significant data-protection efforts, criminal activity, such as cyber-attacks, lapses in our controls or the intentional or negligent actions of employees, business associates or third parties, may undermine our privacy and security measures.
While we engage in significant cybersecurity and data-protection efforts, criminal activity (such as cyberattacks), lapses in our controls, impersonation of individuals with proper access controls, or the intentional or negligent actions of employees, business associates or third parties may undermine our cybersecurity and privacy measures.
Sensitive customer data may also be present on customer-owned devices entrusted to us for service and repair. Vulnerable code on products sold or serviced, including our exclusive brands, may also result in a compromise of customer privacy or security.
This dual challenge amplifies our exposure to potential data privacy breaches, automated exploitation, and integrity risks in digital ecosystems. Sensitive customer data may also be present on customer-owned devices entrusted to us for service and repair. Vulnerable code on products sold or serviced, including our exclusive brands, may also result in a compromise of customer privacy or security.
The principal sources of our liquidity are funds generated from operating activities, available cash and liquid investments, credit facilities, other debt arrangements and trade payables. Our liquidity could be materially adversely impacted if our vendors reduce payment terms and/or impose tighter credit limits. If our sources of liquidity do not satisfy our requirements, we may need to seek additional financing.
The principal sources of our liquidity are funds generated from operating activities, available cash and cash equivalents, short-term investments, credit facilities, other debt arrangements and trade payables. Our liquidity could be materially adversely impacted if our vendors reduce payment terms and/or impose tighter credit limits.
We operate a portfolio of brands with a commitment to customer service and innovation. We believe that recognition and the reputation of our company and our brands are key to our success. Operational factors, such as failure to deliver high quality services, uncompetitive pricing, failure to meet delivery promises or business interruptions, could damage our reputation.
We believe that recognition and the reputation of our company and our brands are key to our success. Operational factors, such as failure to deliver high quality services, offer competitive pricing, or meet delivery promises could damage our reputation.
It is important that we maintain optimal levels of inventory in each store and distribution center and respond rapidly to shifting demands. Any disruption to, or inefficiency in, our supply chain network, whether due to geopolitical conflicts or catastrophic events, could damage our revenue and profitability.
It is important that we maintain optimal levels of inventory in each store and distribution center and respond rapidly to shifting demands. Any disruption to our supply chain network, including for any of the reasons above, could damage our revenue and profitability.
In addition, any compromise of our data security may materially increase the costs we incur to protect against such breaches and could subject us to additional legal risk. Product safety and quality concerns could have a material adverse impact on our revenue and profitability.
In addition, any compromise of our data security may materially increase the costs we incur to protect against such breaches and could subject us to additional legal risk.
Further, threat actors may leverage AI to engage in automated, targeted and coordinated attacks of our systems. ‎ 14 Failure to prevent or effectively respond to a breach of the privacy or security of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions.
Failure to prevent or effectively respond to a breach of the security or privacy of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions.
We operate in a highly , increasingly dynamic industry sector fueled by constant technological innovation and disruption, including most recently by the proliferation of artificial intelligence (“AI”) technologies.
We operate in a highly and increasingly dynamic industry sector fueled by constant technological innovation, advancement and disruption, including the rapid integration of artificial intelligence (“AI”) into consumer products.
We typically hold material balances of cash, cash equivalents and/or short-term investments and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets.
If our sources of liquidity do not satisfy our requirements, we may need to seek additional financing. We typically hold material balances of cash, cash equivalents and/or short-term investments and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets.
Additionally, increasingly prevalent legal and regulatory restrictions on the terms or enforceability of non-competition, employee non-solicitation, confidentiality and similar restrictive covenant clauses could make it more difficult to retain qualified personnel. Our strategy to expand into new products and services (including health technology, services and logistics) brings new business, financial and regulatory risks.
Additionally, increasingly prevalent legal and regulatory restrictions on the terms or enforceability of non-competition, employee non-solicitation, confidentiality and similar restrictive covenant clauses could make it more difficult to retain qualified personnel.
If we fail to secure these systems against attacks, or fail to effectively upgrade and maintain our hardware, software, network, and system infrastructure and improve the efficiency and resiliency of our systems, it could cause system interruptions and delays.
If we fail to secure these systems against attacks, or fail to effectively configure, upgrade and maintain our hardware, software, network, and system infrastructure and improve the efficiency, resiliency and capacity of our systems, it could cause system interruptions and delays and hinder our ability to accept and fulfill customer orders, provide customer service and/or perform other necessary business functions.
Vendors may also fail to invest adequately in design, production or distribution facilities and may reduce their customer incentives, advertising and promotional activities or change their pricing policies. These and other related issues could have a material adverse impact on our financial results. We rely heavily on our information technology systems for our key business processes.
Vendors may also fail to adequately invest in new technology, design, production or distribution facilities and may reduce their customer incentives, advertising and promotional activities or change their pricing policies. These and other similar factors could have a material adverse impact on our revenue and profitability.
As a result, consumers may be affected in many ways, including, for example: whether or not they make a purchase; their choice of brand, model or price-point; how frequently they upgrade or replace their devices; and their appetite for complementary services (for example, My Best Buy Plus™ or My Best Buy Total™ membership).
These macroeconomic conditions impact consumer behavior and spending in various ways, including: • whether consumers make a purchase; • how frequently consumers upgrade or replace their devices; • consumers' choice of brand, model or price-point; and • consumers' appetite for complementary services (for example, My Best Buy Plus™ or My Best Buy Total™ membership).
Damage to the perception or reputation of our brands could result in, among other things, declines in revenues and customer loyalty, decreases in gift card and service plan sales, lower employee retention and productivity and vendor relationship issues, all of which could materially adversely affect our revenue and profitability.
Damage to the perception or reputation of our brands could result in, among other things, declines in revenues and customer loyalty (including as a result of any boycotts), decreases in gift card and service plan sales, lower employee retention and productivity and vendor relationship issues, all of which could materially adversely affect our revenue and profitability. 13 Table of Contents Failure to effectively identify, manage and execute enterprise-wide strategies could have a negative impact on our business.
In addition, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions to these goals.
In addition, we could be criticized or face legal action, including shareholder suits, customer boycotts or governmental scrutiny, for the scope or nature of such initiatives or goals, or for any revisions to these goals.
In addition, vendors may decide to limit or cease allowing us to offer certain categories, focus their marketing efforts on alternative channels or make unfavorable changes to our financial or other terms. ‎ 11 We are also dependent on a small number of mobile carriers to allow us to offer mobile devices with carrier connections.
In addition, vendors may decide to limit or cease allowing us to offer certain categories, focus their marketing efforts on alternative channels or make unfavorable changes to our financial or other terms.
If our new or emerging strategic ventures are unsuccessful, our liquidity and profitability could be materially adversely affected, and we may be required to recognize material impairments to goodwill and other assets acquired. New ventures may also divert our financial resources and management’s attention from other important areas of our business.
If our new or emerging strategies are unsuccessful, our reputation could be negatively impacted. Additionally, liquidity and profitability could be materially adversely affected, and we may be required to recognize material impairments to goodwill and other assets acquired or elect to discontinue certain areas of the business.
Our performance is highly dependent on attracting, retaining and engaging appropriately qualified employees in our stores, service centers, distribution centers, field and corporate offices. Our strategy of offering high-quality services and assistance for our customers requires a highly trained and engaged workforce.
Our performance is highly dependent on attracting, retaining and engaging appropriately qualified employees in our stores, service centers, distribution centers, field and corporate offices.
If our financial results for a particular period do not meet any guidance we provide or the expectations of market participants, or if we reduce any guidance for future periods, the market price of our common stock may decline. Item 1B. Unresolved Staff Comments. Not applicable.
If our financial results for a particular period do not meet any guidance we provide or the expectations of market participants, or if we reduce any guidance for future periods, the market price of our common stock may decline. 19 Table of Contents Failure to effectively manage our costs could have a material adverse effect on our profitability.
We compete with many local, regional, national and international retailers (both online and brick and mortar), as well as some of our vendors and mobile network carriers that market their products directly to consumer s .
We compete against many local, regional, national and international retailers (both online and brick and mortar), as well as against some of our vendors and mobile network carriers that are leveraging their own direct-to-customer channels to market and sell products. Shoppers are increasingly price-conscious when making discretionary purchases.
These and other similar factors could have a material adverse impact on our revenue and profitability. Strategic Risks We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability.
Strategic Risks We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability. We constantly strive to offer consumers the best value in a highly competitive retail sector.
We also share personal and confidential information with suppliers and other third parties and we use third-party technology and systems that process and transmit information for a variety of activities. We have been the target of attempted cyber-attacks and other security threats and we may be subject to breaches of our information technology systems.
We have been the target of attempted cyber-attacks and other security threats, and we may be subject to breaches of our information technology systems.
We may also be subject to continued market pressure to increase employee hourly wage rates and increased cost pressure on employer-provided benefits. Our need to implement corresponding adjustments within our labor model and compensation and benefit packages could have a material adverse impact on the profitability of our business.
We operate in a competitive labor market, and there is a risk that market increases in compensation and employer-provided benefits could have a material adverse effect on our profitability. We may be subject to continued market pressure to increase employee hourly wage rates and employer-provided benefits, especially as the cost of living increases.
These issues include, but are not limited to, the following: The conflict in Ukraine has exacerbated global geopolitical tensions , and may continue to significantly impact fuel prices, inflation, the global supply chain, cybersecurity and other macroeconomic conditions, which may further adversely affect global economic growth, consumer confidence and demand for our products and services.
Ongoing or emerging conflicts, including those in the Middle East, Ukraine and the South China Sea, may continue to impact fuel prices, inflation, the global supply chain, cybersecurity and other macroeconomic conditions, which may further adversely affect global economic growth, consumer confidence and demand for our products and services.
Our ability to offer competitive delivery times and delivery costs depends on many factors and our failure to successfully manage these factors and offer competitive delivery options could negatively impact the demand for our products and our profit margins.
Failure to manage these factors effectively while offering competitive delivery options could negatively impact our profit margins and the demand for our products. Our ability to remain competitive also depends on effectively maintaining and growing our customer base and accurately forecasting their spending levels.
The risks associated with our dependence on third parties are greater for small parcel home deliveries because of the relatively small number of carriers with the scope and capacity required by our business. The continuing growth of online purchases for delivery increases our exposure to these risks.
These risks are compounded for small parcel home deliveries, as we are dependent on a relatively small number of carriers with the scope and capacity required by our business.
If our CRS-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals on a timely basis, or at all, our reputation, business, financial performance and growth could be adversely affected. ‎ 16 Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate.
Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate.
We operate retail locations in Canada, Current Health operates in the UK, and most of our exclusive brands products are manufactured by contract manufacturers based in Southeast Asia. We also have wholly-owned legal entities registered in various other foreign countries, including Bermuda, China, Hong Kong, Luxembourg, the Republic of Mauritius and the UK.
We have wholly-owned legal entities registered in various foreign countries, including Bermuda, Canada, China, India, Luxembourg, the Republic of Mauritius, the United Kingdom and Vietnam. Additionally, most of our exclusive brand products are manufactured by contract manufacturers based in China, Mexico and Southeast Asia. During fiscal 2026, our International segment generated approximately 8% of our consolidated revenue.
We are subject to risks associated with vendors that source products outside of the U.S. Our ability to find qualified vendors who can supply products in a timely and efficient manner that meet our internal standards of quality and safety can be difficult, especially with respect to goods sourced from outside the U.S.
Recalls of products, particularly when combined with lack of available alternatives or difficulty in sourcing sufficient volumes of replacement products, could also have a material adverse impact on our revenue and profitability. 15 Table of Contents Our ability to find qualified vendors who can supply products that meet our internal standards of quality and safety in a timely and efficient manner can be difficult, especially with respect to goods sourced from outside the U.S.
Catastrophic events, including the effects of climate change, could adversely affect our operating results. The risk or actual occurrence of various catastrophic events could have a material adverse effect on our financial performance.
One or more of these factors could have a material adverse effect on our supply chain, the cost of our products or our revenues and financial results. Catastrophic events could adversely affect our operating results. Catastrophic events, including those driven or intensified by climate change, pose a growing risk to our operating results and financial performance.
We cannot predict the extent or duration of sanctions in response to the conflict in Ukraine, nor can we predict the effects of legislative or other governmental actions or regulatory scrutiny of Russia, its allies or other countries with which Russia has significant trade or financial ties, including China. Further deterioration of relations between Taiwan and China, the resulting actions taken, the response of the international community and other factors affecting trade with China or political or economic conditions in Taiwan could disrupt the manufacturing of products or hardware components in the region, such as semiconductors and television panels sourced from Taiwan or the broader array of products sourced from China. The Israel-Hamas War has heightened geopolitical tensions in the Middle East region.
For example, any further deterioration of relations between Taiwan and China, the resulting actions taken, the response of the international community and other factors affecting trade with China or political or economic conditions in Taiwan could disrupt the manufacturing and distribution of products or hardware components in the region, such as semiconductors and television panels sourced from Taiwan or the broader array of products sourced from China.
Additionally, newly applicable and potential new or significantly revised state, provincial and federal laws and regulations in the jurisdictions in which we do business are expanding our obligations to protect and honor the privacy and security of customer data, requiring additional resources and creating incremental risk arising from a potential breach or compliance failure.
Any compromise of our customer information or other confidential information could have a material adverse impact on our reputation and/or our relationships with our customers and partners, which may in turn have a negative impact on our revenue and may expose us to material costs, penalties and claims. 17 Table of Contents Additionally, newly applicable and potential new or significantly revised state, provincial and federal laws and regulations in the jurisdictions in which we do business are expanding (and may further expand) our obligations to protect and honor the privacy and security of personal information, imposing new restrictions on the collection, use, sharing and retention of data and requiring additional implementation resources, all of which create incremental risk arising from a potential breach or compliance failure.
Operational Risks Interruptions and other factors affecting our stores and supply chain, including in-bound deliveries from our vendors, may adversely affect our business. Our stores and supply chain assets are a critical part of our operations, particularly considering industry trends and initiatives, such as ship-from-store and the emphasis on fast delivery when purchasing online.
Our supply chain assets are a critical part of our operations, particularly considering industry trends and initiatives, such as ship-from-store and the emphasis on fast delivery when purchasing online. We depend on our vendors’ abilities to deliver products to us at the right location, at the right time and in the right quantities.
We may provide public guidance on our expected financial results or other forward-looking information for future periods.
Financial and Market Risks Failure to meet any financial performance guidance or other forward-looking statements we may provide to the public could result in a decline in our stock price. We may provide public guidance on our expected financial results or other forward-looking information for future periods.
Competition is becoming increasingly diverse, including in the advertising revenue space and may also result from new entrants into the markets we serve, including unforeseen players that may be able to more aggressively leverage technologies (for example AI and platform integrations).
Diverse competition may also arise from new entrants into the markets we serve, including unexpected players who could more aggressively leverage technologies such as AI and platform integrations.
In addition, significant turnover of our executive team or other employees in key positions with specific knowledge relating to our operations and industry may negatively impact our operations. We operate in a competitive labor market and there is a risk that market increases in compensation and employer-provided benefits could have a material adverse effect on our profitability.
In addition, significant turnover of our executive team or other employees in key positions with specific knowledge relating to our operations and industry may negatively impact our operations and financial results and potentially have cascading effects on our employees.
Any failure or interruption in these systems could have a material adverse impact on our business. The effective and efficient operation of our business is dependent on our information technology systems and those of our information technology vendors.
The effective and efficient operation of our business is dependent on our information technology systems and those of our information technology service providers.
External factors, such as negative public remarks or accusations, or our failure to meet enhanced expectations on corporate response to sensitive topics, could also be damaging. Third parties may commit fraud (including AI-driven fraud) while using our brand without our permission, possibly harming brand perception or reputation.
External factors, such as negative public remarks or accusations, heightened violence and crime in or around our stores, or our failure to meet enhanced, and sometimes conflicting, expectations on corporate response to sensitive topics (including the use of AI), could also be damaging.
Such factors include, for example: changing patterns of customer consumption and behavior, particularly in light of an evolving omnichannel environment; our ability to adjust store operating models to adapt to these changing patterns; the location and appropriate number of stores, supply chain and other facilities in our portfolio; the interior layout, format and size of our stores; the products and services we offer at each store; the local competitive positioning, trade area demographics and economic factors for each of our stores; the primary term lease commitment and long-term lease option coverage for each store; and the occupancy cost of our stores relative to market rents.
In addition, any of the following factors could impact our long-term real estate strategy: • our ability to adjust store operating models to adapt to changing consumer patterns; • the location and appropriate number of stores, supply chain and other facilities in our portfolio; • the products and services we offer at each store; • the local competitive positioning, trade area demographics and economic factors for each of our stores; • the primary term lease commitment and long-term lease option coverage for each store; and • our ability to meet the evolving physical upgrades and maintenance needs of stores, facilities, and supply chain infrastructure necessary to support any changes to our strategy. 14 Table of Contents Operational Risks Interruptions and other factors affecting our supply chain may adversely affect our business.
Real GDP growth, inflation (including wage inflation), consumer confidence, phasing out of public-health-emergency supports, employment levels, oil prices, interest, tax and foreign currency exchange rates, availability of consumer financing, housing market conditions, limitations on a government’s ability to borrow and/or spend capital, cost of living (e.g., food, fuel), any recession (and resulting corresponding declines in consumer sentiment) and other macroeconomic trends can adversely affect consumer demand for the products and services that we offer.
Consumer demand for the products and services that we offer could be, or could continue to be, affected by a number of factors, including: real GDP growth, inflation, recession, consumer confidence, employment levels, effects of government closures, cost of living, uncertainty over the availability of government benefits, tax rates, availability of consumer financing, interest rates, housing market conditions, foreign currency exchange rates, the price of oil, gas and other commodities and other macroeconomic trends.
The impact of geopolitical tensions, including the potential implementation of more restrictive trade policies, higher tariffs or the renegotiation of existing trade agreements in the U.S. or countries where we sell our products and services or procure products, could have a material adverse effect on our business.
Geopolitical tensions, both domestic and international, including issues related to trade routes, political instability and divisiveness, the potential implementation of more restrictive trade policies, tariff increases and/or volatility, the realignment of alliances or the renegotiation of existing trade agreements could continue to have a material adverse impact on our business.
This arrangement exposes us to the following additional potential risks, which could have a material adverse effect on our operating results: we have greater exposure and responsibility to consumers for warranty replacements and repairs as a result of exclusive brands product defects, and our recourse to contract manufacturers for such warranty liabilities may be limited in foreign jurisdictions; we may be subject to regulatory compliance and/or product liability claims relating to personal injury, death or property damage caused by exclusive brands products, some of which may require us to take significant actions, such as product recalls; we may experience disruptions in manufacturing or logistics in the future due to inconsistent and unanticipated order patterns, our inability to develop long-term relationships with key manufacturers, diseases or pandemics, ongoing and unforeseen natural disasters or geopolitical crises; we may not be able to locate manufacturers that meet our internal standards, whether for new exclusive brands products or for migration of the manufacturing of products from an existing manufacturer; 13 we may be subject to a greater risk of inventory obsolescence as we do not generally have return-to-vendor rights; we are subject to developing and often-changing labor and environmental laws for the manufacturing of products in foreign countries, and we may be unable to conform to new rules or interpretations in a timely manner; we may be subject to claims by technology or other intellectual property owners if we inadvertently infringe upon their patents or other intellectual property rights or if we fail to pay royalties owed on our exclusive brands products; our operations may be disrupted by trade disputes or excessive tariffs, including any future trade disputes or future phases of trade negotiations with China and we may not be able to source alternatives quickly enough to avoid interruptions in product supply; and we may be unable to obtain or adequately protect patents and other intellectual property rights on our exclusive brands products or manufacturing processes.
Because we have greater responsibility for products under our exclusive brand labels, recalls or safety issues involving these products may present heightened risks compared to branded goods, including: • exposure and responsibility to consumers for warranty replacements and repairs as well as product liability claims (including bodily injury or death) and government-enforced actions, some of which may require us to take significant actions, such as recalling products; • inventory obsolescence as we do not generally have return-to-vendor rights; • disruptions in manufacturing or logistics due to inconsistent and unanticipated order patterns; • our inability to develop long-term relationships with key manufacturers; • claims by technology or other intellectual property owners if we inadvertently infringe upon their patents or other intellectual property rights or if we fail to pay royalties owed on our exclusive brand products; • inability to obtain or adequately protect patents and other intellectual property rights on our exclusive brand products or manufacturing processes; and • failure to maintain consistent quality, availability and competitive pricing, which could have a material adverse impact on the demand for exclusive brand products and the profits we are able to generate from them.
We depend on our vendors’ abilities to deliver products to us at the right location, at the right time and in the right quantities. We also depend on third parties for the operation of certain aspects of our supply chain network.
We also depend on third parties for the operation of certain aspects of our supply chain network. The continuing growth of online purchases for delivery increases our exposure to these risks.
Factors that affect our ability to maintain sufficient numbers of qualified employees include, for example, employee engagement, our reputation, unemployment rates, competition from other employers, availability of qualified personnel and our ability to offer appropriate compensation and benefit packages. Failure to recruit or retain qualified employees may impair our efficiency and effectiveness and our ability to pursue growth opportunities.
Our ability to maintain sufficient numbers of qualified employees depends on a number of factors, such as employee engagement, our reputation, our ability to train and develop our employees, our ability to connect with and promote available talent pools, our development and maintenance of employee-desired policies and practices, unemployment rates, competition from other employers, availability of qualified personnel and our ability to offer appropriate compensation and benefit packages.
We are subject to changing rules and regulations promulgated by several governmental and self-regulatory organizations, including the SEC, the New York Stock Exchange and the Financial Accounting Standards Board. These rules and regulations continue to evolve in scope and complexity, with many new requirements emerging in response to laws enacted by Congress, demanding increased attention and vigilance for compliance.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to cybersecurity, corporate responsibility and sustainability matters. We are subject to changing rules and regulations promulgated by several governmental and self-regulatory organizations, including the SEC, the New York Stock Exchange, the Financial Accounting Standards Board and various states.
Rating agencies may change the ratings assigned to us due to developments that are beyond our control, including the introduction of new rating practices and methodologies. Failure to meet any financial performance guidance or other forward-looking statements we may provide to the public could result in a decline in our stock price.
Rating agencies may change the ratings assigned to us due to developments that are beyond our control, including the introduction of new rating practices and methodologies. 20 Table of Contents Item 1B. Unresolved Staff Comments. Not applicable.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur EIP organization, led by our CISO, is responsible for the design and implementation of our information security program. Our current CISO has been with the Company for more than eight years—serving as our CISO for nearly seven years—and has extensive cybersecurity experience through leadership and consulting roles.
Biggest changeOur EIP organization, led by our CISO, is responsible for the design and implementation of our information security program. Our current CISO has been with the company for more than ten years—serving as our CISO for nearly nine years—and has extensive cybersecurity experience through leadership and consulting roles. His current leadership team has over 100 years of combined cybersecurity experience.
However, our Enterprise Risk Management program has recognized that we face ongoing risks from cybersecurity threats that, if not successfully prevented or mitigated, could materially affect us, including our operations, business strategy, results of operations or financial condition. For additional information on this risk, see Item 1A, Risk Factors, of this Annual Report on Form 10-K.
However, our Enterprise Risk Management program has recognized that we face ongoing risks from cybersecurity threats that, if not successfully prevented or mitigated, could materially affect us, including our operations, business strategy, results of operations or financial condition. For additional information on such risks, see Item 1A, Risk Factors, of this Annual Report on Form 10-K.
Certain specific, defined components of our technology environment are assessed by third-party auditors with a view to alignment with industry standards such as, for example, the Payment Card Industry Data Security Standards. 18 We also periodically retain outside expertise to conduct a maturity assessment of our program against industry standards and participants.
Certain specific, defined components of our technology environment are assessed by third-party auditors with a view to align with industry standards such as, for example, the Payment Card Industry Data Security Standards. We also periodically retain outside expertise to conduct a maturity assessment of our program against industry standards and participants.
Cybersecurity Governance Our Board, with oversight by the Audit Committee, oversees management’s processes for identifying and mitigating cybersecurity risks. Executive management including our Chief Information Security Officer (“CISO”), who reports to our General Counsel & Chief Risk Officer, updates the Audit Committee on our cybersecurity posture no less frequently than quarterly and periodically update the full Board.
Cybersecurity Governance Our Board, with oversight by the Audit Committee, oversees management’s processes for identifying and mitigating cybersecurity risks. Executive management including our Chief Information Security Officer (“CISO”), who reports to our Chief Legal & Risk Officer, update the Audit Committee on our cybersecurity posture no less frequently than quarterly and periodically update the full Board.
These and other EIP team members work closely with stakeholders across the Company to implement the program’s policies, standards and processes and help ensure awareness that securing customer information and honoring our privacy promises are core employee obligations, as highlighted in our Code of Ethics and reinforced through our Valuable Information Protection training program.
These and other EIP team members work closely with stakeholders across the company to implement the program’s policies, standards and processes. They also help ensure awareness that securing customer information and honoring our privacy promises are core employee obligations, as highlighted in our Code of Ethics and reinforced through our Valuable Information Protection training program. 21 Table of Contents
Our program is informed by industry standards such as, for example, the National Institute of Standards and Technology’s Framework for Improving Critical Infrastructure Cybersecurity (“NIST CSF”), but this does not imply that we meet all technical standards, specifications or requirements under the NIST CSF or other sources.
Our program is informed by industry standards such as, for example, the National Institute of Standards and Technology’s Cybersecurity Framework (“NIST CSF”), but this does not imply that we meet all technical standards, specifications or requirements under the NIST CSF, NIST CSF 2.0 or other sources.
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His current leadership team comprising seven individuals has over 130 years of combined cybersecurity experience.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeStores (1) Alabama 11 Nebraska 4 Alaska 2 Nevada 9 Arizona 21 New Hampshire 6 Arkansas 7 New Jersey 26 California 130 New Mexico 5 Colorado 22 New York 45 Connecticut 9 North Carolina 32 Delaware 3 North Dakota 4 District of Columbia 1 Ohio 34 Florida 62 Oklahoma 12 Georgia 28 Oregon 11 Hawaii 2 Pennsylvania 33 Idaho 5 Puerto Rico 2 Illinois 41 Rhode Island 1 Indiana 22 South Carolina 13 Iowa 10 South Dakota 2 Kansas 8 Tennessee 13 Kentucky 9 Texas 101 Louisiana 15 Utah 11 Maine 3 Vermont 1 Maryland 19 Virginia 30 Massachusetts 21 Washington 20 Michigan 28 West Virginia 5 Minnesota 19 Wisconsin 22 Mississippi 7 Wyoming 1 Missouri 14 Total Domestic store count 965 Montana 3 Square footage (in thousands) 36,771 (1) Includes 20 Pacific Sales stores, 22 Best Buy Outlet Centers and 22 Yardbird stand-alone stores. 19 International Stores The location and total square footage of our International segment stores at the end of fiscal 2024 were as follows: Canada Stores (1) Alberta 25 British Columbia 27 Manitoba 4 New Brunswick 3 Newfoundland 1 Nova Scotia 3 Ontario 69 Prince Edward Island 1 Quebec 23 Saskatchewan 4 Total International store count 160 Square footage (in thousands) 3,623 (1) (1) Includes 32 Best Buy Mobile stores.
Biggest changeStores (1) Alabama 11 Nebraska 4 Alaska 2 Nevada 9 Arizona 19 New Hampshire 6 Arkansas 7 New Jersey 25 California 127 New Mexico 5 Colorado 20 New York 41 Connecticut 9 North Carolina 30 Delaware 3 North Dakota 4 District of Columbia 1 Ohio 32 Florida 59 Oklahoma 12 Georgia 28 Oregon 11 Hawaii 2 Pennsylvania 32 Idaho 5 Puerto Rico 2 Illinois 36 Rhode Island 1 Indiana 22 South Carolina 13 Iowa 10 South Dakota 2 Kansas 7 Tennessee 13 Kentucky 9 Texas 98 Louisiana 15 Utah 9 Maine 3 Vermont 1 Maryland 17 Virginia 28 Massachusetts 20 Washington 20 Michigan 27 West Virginia 6 Minnesota 16 Wisconsin 21 Mississippi 7 Wyoming 1 Missouri 14 Total Domestic store count 926 Montana 4 Square footage (in thousands) 35,954 (1) Includes 20 Pacific Sales stores, 18 Outlet Centers and 2 Yardbird stores. 22 Table of Contents International Stores The location and total square footage of our International segment stores at the end of fiscal 2026 were as follows: Canada Stores (1) Alberta 23 British Columbia 25 Manitoba 4 New Brunswick 3 Newfoundland 1 Nova Scotia 3 Ontario 56 Prince Edward Island 1 Quebec 23 Saskatchewan 3 Total International store count 142 Square footage (in thousands) 3,575 (1) Includes 12 Best Buy Mobile stand-alone stores.
Item 2. Properties. Domestic Stores The location and total square footage of our Domestic segment stores at the end of fiscal 2024 were as follows: U.S. Stores (1) U.S.
Item 2. Properties. Domestic Stores The location and total square footage of our Domestic segment stores at the end of fiscal 2026 were as follows: U.S. Stores (1) U.S.
We also lease additional domestic and international office space to support and carry out our business operations.
We also lease additional office space to support and carry out our business operations.
Ownership Status The ownership status of our stores at the end of fiscal 2024 was as follows: Leased Locations Owned Locations Owned Buildings and Leased Land Domestic 910 23 32 International 153 3 4 Distribution The ownership status and total square footage of space utilized for distribution at the end of fiscal 2024 were as follows: Square Footage (in thousands) Leased Locations Owned Locations Domestic 14,987 3,168 International 1,496 - Other Properties We own our corporate headquarters buildings located in Richfield, Minnesota.
Ownership Status The ownership status of our stores by segment at the end of fiscal 2026 was as follows: Leased Locations Owned Locations Owned Buildings and Leased Land Domestic 871 23 32 International 135 3 4 Distribution The ownership status and total square footage of space utilized for distribution by segment at the end of fiscal 2026 were as follows: Square Footage (in thousands) Leased Locations Owned Locations Domestic 15,416 3,168 International 1,418 - Other Properties We own our corporate headquarters buildings located in Richfield, Minnesota.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. For additional information regarding our legal proceedings, see Note 13, Contingencies and Commitments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
Biggest changeItem 3. Legal Proceedings. For additional information regarding our legal proceedings, see Note 12, Contingencies and Commitments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeShe was responsible for sales and profits in the Company’s stores, in addition to enacting the human resources and talent management strategies for the Canadian operations. She has served in a variety of retail, operations, marketing and human resources leadership roles since beginning her career in retail more than 30 years ago. Prior to joining Best Buy, Ms.
Biggest changeShe has served in a variety of retail, operations, marketing and human resources leadership roles since beginning her career in retail more than 30 years ago. Prior to joining Best Buy, Ms. Scarlett was the chief operating officer from 2012 to 2014 at Grafton-Fraser Inc., a leading Canadian retailer of men’s apparel.
She previously served as our president of U.S. retail stores from 2019 until 2020 and was responsible for the execution and operation of all domestic Best Buy store locations. Ms. Scarlett joined Best Buy in 2014 as senior vice president of retail and chief human resources officer for Best Buy Canada, serving in that role until 2017.
She served as our president of U.S. retail stores from 2019 until 2020 and was responsible for the execution and operation of all domestic Best Buy store locations. Ms. Scarlett joined Best Buy in 2014 as senior vice president of retail and chief human resources officer for Best Buy Canada, serving in that role until 2017.
He previously served as our vice president, controller and chief accounting officer from April 2015 until his current role. Mr. Watson is responsible for our controllership, financial operations and external reporting functions. Mr. Watson served in the role of vice president, finance - controller from 2014 to April 2015.
He previously served as our vice president, controller and chief accounting officer from 2015 until his current role. Mr. Watson is responsible for our controllership, financial operations and external reporting functions. Mr. Watson served in the role of vice president, finance - controller from 2014 to 2015.
In that role, she also played a critical role in developing and executing the Company’s Building the New Blue growth strategy and related transformation. Ms. Barry joined Best Buy in 1999 and has held a variety of financial and operational roles within the organization, both in the field and at corporate.
In that role, she also played a critical role in developing and executing the company’s Building the New Blue growth strategy and related transformation. Ms. Barry joined Best Buy in 1999 and has held a variety of financial and operational roles across the organization, both in the field and at corporate.
In this role, he is responsible for overseeing all aspects of global finance, inclusive of audit, procurement and financial services, as well as enterprise strategy and real estate. Since joining Best Buy in 2006, Mr. Bilunas has served in a variety of financial leadership roles, both in the field and at the corporate campus.
In this role, he is responsible for overseeing all aspects of global finance, inclusive of audit, procurement and financial services, as well as enterprise strategy, retail operations and real estate. Since joining Best Buy in 2006, Mr. Bilunas has served in a variety of financial leadership roles, both in the field and at corporate.
Prior to that role, he was vice president - finance, domestic controller from 2013 to 2014. Mr. Watson was also senior director, external reporting and corporate accounting from 2010 to 2013 and director, external reporting and corporate accounting beginning in 2007. Prior to joining us in 2005, Mr. Watson worked at KPMG from 1995 to 2005.
Prior to that role, he was vice president - finance, domestic controller from 2013 to 2014. Mr. Watson was also senior director, external reporting and corporate accounting from 2010 to 2013 and director, external reporting and corporate accounting beginning in 2007. Prior to joining Best Buy in 2005, Mr. Watson worked at KPMG from 1995 to 2005.
Before Best Buy, he worked at Carlson Inc., NRG Energy Inc., Bandag Inc. and KPMG. Mr. Bilunas serves on the board of Genesco, Inc. Jason Bonfig is our Senior Executive Vice President of Customer Offerings and Fulfillment.
Before Best Buy, he worked at Carlson Inc., NRG Energy Inc., Bandag Inc. and KPMG. Mr. Bilunas serves on the board of Genesco, Inc. Jason Bonfig is our Senior Executive Vice President of Customer Offering, Fulfillment and Best Buy Canada.
Prior to his current role, Mr. Bonfig served in the positions of chief category officer – computing, mobile, gaming, exclusive brands, printing, wearables and accessories from 2018 to 2019; senior vice president – computing, mobile, tablets, wearables, printing and accessories from 2014 to 2018. Mr. Bonfig has also held merchant-related roles since joining the company in 1999. Mr.
Bonfig served in the positions of chief category officer – computing, mobile, gaming, exclusive brands, printing, wearables and accessories from 2018 to 2019 ; and senior vice president – computing, mobile, tablets, wearables, printing and accessories from 2014 to 2018. Mr. Bonfig has also held merchant-related roles since joining the company in 1999. Todd G.
She also serves on the executive committee for the Business Roundtable, Business Council, Retail Industry Leaders Association and the Minnesota Business Partnership. Matt Bilunas is our Senior Executive Vice President of Enterprise Strategy, Chief Financial Officer (“CFO”).
She also serves on the executive committees for the Business Council and the Minnesota Business Partnership, and serves as the Chairwoman of the Retail Industry Leaders Association. Matt Bilunas is our Senior Executive Vice President, Chief Financial Officer (“CFO”) and Enterprise Strategy.
Item 4. Mine Safety Disclosures. Not applicable. 20 Information about our Executive Officers (As of March 13, 2024) Name Age Position with the Company Years with the Company Corie S.
Item 4. Mine Safety Disclosures. Not applicable. 23 Table of Contents Information about our Executive Officers (As of March 18, 2026 ) Name Age Position with the Company Years with the Company Corie S.
A Minnesota native, he worked for several years as a telecommunications and technology attorney in Washington, D.C., before returning to Minneapolis. Mr. Hartman sits on the advisory board of Markaaz, Inc. He serves as treasurer of the Retail Litigation Center and as chair of the Best Buy Foundation.
A Minnesota native, he worked for several years as a telecommunications and technology attorney in Washington, D.C., before returning to Minneapolis. Mr. Hartman sits on the advisory board of Markaaz, Inc. He serves on the boards of the Guthrie Theatre, the Retail Litigation Center, Equal Justice Works and Project Success.
Hartman was appointed General Counsel in 2019 and has also served as Chief Risk Officer since 2017. In this role, he is responsible for the company’s legal activities and its global risk and compliance program. He also serves as corporate secretary. Mr. Hartman joined Best Buy in 2006.
Hartman is our Executive Vice President, Chief Legal and Risk Officer and Secretary. In this role, he is responsible for the company’s legal activities and its global risk and compliance program. He also serves as corporate secretary. Mr. Hartman joined Best Buy in 2006.
He started as a territory finance director in Los Angeles and has worked in the company’s domestic and international businesses. Mr. Bilunas has been a key finance leader during Best Buy’s transformation.
He started as a territory finance director in Los Angeles and has worked in the company’s domestic and international businesses.
He serves on the boards of directors of Achieve Twin Cities and the Best Buy Foundation. PART II
He serves on the board of directors of the Best Buy Foundation. PART II
He also sits on the board of the Guthrie Theater and on the board of Trademark Theater. Kamy Scarlett is our Senior Executive Vice President of Human Resources, Corporate Affairs and Canada. In this role, she oversees talent development and the health and well-being of our employees worldwide, communications and public affairs, and our Canadian business. Additionally, Ms.
He is also an adjunct faculty member at the University of Minnesota Law School. 24 Table of Contents Kamy Scarlett is our Senior Executive Vice President of Corporate Affairs and Human Resources. In this role, she oversees talent development and the health and well-being of our employees worldwide, communications and public affairs.
Prior to her current role, she served as our chief financial officer & chief strategic transformation officer responsible for overseeing all aspects of strategic transformation and growth, digital and technology, global finance, investor relations, enterprise risk and compliance, integration management and Best Buy Health.
Prior to becoming CEO in June 2019, she was the company’s chief financial officer and chief strategic transformation officer, overseeing strategic transformation and growth, digital and technology, global finance, investor relations, enterprise risk and compliance, integration management and Best Buy Health.
Scarlett serves as Executive Vice President of Best Buy Canada, where the Company operates more than 150 stores. She was appointed executive vice president, human resources in 2017. She also assumed responsibility for Best Buy Canada in 2021 and communications and public affairs in 2023.
She was appointed executive vice president, human resources in 2017. She also assumed responsibility for communications and public affairs in 2023. She previously had responsibility for Best Buy Canada from 2021 to 2024, with oversight and responsibility for Canadian business performance.
Her prior roles include: the company’s chief strategic growth officer and the interim leader of Best Buy’s services organization from 2015 until 2016; senior vice president of domestic finance from 2013 to 2015; vice president, chief financial officer and business development of our home business group from 2012 to 2013; and vice president, finance of the home customer solutions group from 2010 to 2012.
She also served as senior vice president of domestic finance from 2013 to 2015; vice president, chief financial officer and business development of our home business group from 2012 to 2013; and vice president, finance of the home customer solutions group from 2010 to 2012. Prior to Best Buy, Ms. Barry worked at Deloitte & Touche LLP.
Hartman 57 General Counsel and Chief Risk Officer 18 Kamy Scarlett 60 Senior Executive Vice President of Human Resources, Corporate Affairs and Canada 10 Mathew R. Watson 53 Senior Vice President, Controller and Chief Accounting Officer 18 Corie S. Barry was appointed our Chief Executive Officer in 2019.
Hartman 59 Executive Vice President, Chief Legal and Risk Officer and Secretary 20 Kamy Scarlett 62 Senior Executive Vice President, Corporate Affairs and Human Resources 12 Mathew R. Watson 55 Senior Vice President, Controller and Chief Accounting Officer 20 Corie S. Barry is our Chief Executive Officer (“CEO”). She also serves on the company’s board of directors.
In this role, he oversees all elements of merchandising and product category management, supply chain and marketing for Best Buy’s core U.S. business . He also leads the company’s Exclusive Brands private-label team. Mr. Bonfig has served in merchant roles for the Company for over 20 years, working in and leading some of the most complex product categories.
In this role, he oversees all elements of merchandising, e-commerce, supply chain and marketing, including Best Buy’s retail media network, Best Buy Ads. He also oversees the Best Buy Canada business and leads the company’s Exclusive Brands private-label team. Mr.
Scarlett serves on the board of the Best Buy Foundation and previously served on the board of Floor & Décor, a specialty retailer of hard surface flooring . Mathew R. Watson was appointed our Senior Vice President, Controller and Chief Accounting Officer in 2017.
She also previously held leadership roles at Loblaw Cos., Hudson’s Bay Co. and Dylex Inc. Ms. Scarlett has served on the board of Dollar General Corporation since August 2024 and previously served on the board of Floor & Décor. Mathew R. Watson was appointed our Senior Vice President, Controller and Chief Accounting Officer in 2017.
Barry 48 Chief Executive Officer 24 Matt Bilunas 51 Senior Executive Vice President of Enterprise Strategy, Chief Financial Officer 18 Jason Bonfig 47 Senior Executive Vice President of Customer Offerings and Fulfillment 25 Damien Harmon 45 Senior Executive Vice President of Customer, Channel Experiences & Enterprise Services 5 Todd G.
Barry 50 Chief Executive Officer 26 Matt Bilunas 53 Senior Executive Vice President, Chief Financial Officer and Enterprise Strategy 20 Jason Bonfig 49 Senior Executive Vice President, Customer Offering, Fulfillment and Best Buy Canada 27 Todd G.
Prior to Best Buy, Ms. Barry worked at Deloitte & Touche LLP. Ms. Barry serves on the board of directors for Best Buy Co., Inc., and Domino’s Pizza Inc. and the board of trustees for the College of St. Benedict.
Additionally, she has served on the board of directors for Domino’s Pizza Inc. since July 2018 and serves on the board of trustees for the College of St. Benedict and the University of St. John's.
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Bonfig serves on the board of the Best Buy Foundation. Damien Harmon is our Senior Executive Vice President of Customer, Channel Experiences & Enterprise Services. He is responsible for the end-to-end customer experience and the work that enhances every interaction with our customers and employees in his organization.
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She became the chief financial officer in 2016 and prior to that served as the company’s chief strategic growth officer and the interim leader of Best Buy’s services organization from 2015 until 2016.
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His areas of responsibility include stores and operations, in-home services and sales, virtual experiences, call centers, membership, and customer strategy, relationship offerings and insights. In his role, Mr. Harmon leads Geek Squad, a national tech-support organization dedicated to helping customers learn about and enjoy their technology. Mr. Harmon previously served as executive vice president of omnichannel from 2021 to 2023.
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Bonfig has served in merchant roles for the company for over 20 years, working in and leading some of the most complex product categories. Prior to his current role, Mr.
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He established a dedicated operations plan to enhance the Company’s ability to create seamless experiences for our customers. He also oversaw our real estate portfolio, stores, operations, services and experiences that span from stores to virtual to in customers’ homes. Prior to that, Mr.
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Harmon served as president, operations from 2020 to 2021 and senior vice president of workforce design from 2019 to 2020. Mr. Harmon first joined Best Buy as a general manager in 2005 and held various leadership positions in store operations, international operations and store leadership, including vice president of retail operations and services. Before rejoining Best Buy in 2019, Mr.
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Harmon spent four years at Bridgestone Americas Inc., where he served as president of GCR Tires from 2017 to 2018 and chief operating officer at Bridgestone Tires from 2016 to 2017. Mr. Harmon serves on the board of Driven Brands and on the board of the Petco Love Foundation. 21 Todd G.
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Scarlett was the chief operating officer from 2012 to 2014 at Grafton-Fraser Inc., a leading Canadian retailer of men’s apparel. She also previously held leadership roles at Loblaw Cos., Hudson’s Bay Co. and Dylex Inc. Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers On February 28, 2022, our Board approved a $5.0 billion share repurchase authorization, which replaced the $5.0 billion share repurchase program authorized on February 16, 2021. There is no expiration date governing the period over which we can repurchase shares under this authorization.
Biggest changeThere is no expiration date governing the period over which we can repurchase shares under this authorization. During fiscal 2026, we repurchased and retired 4.0 million shares at a cost of $273 million.
For additional information, see “Share Repurchases and Dividends” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , and Note 9, Shareholders’ Equity , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
For additional information, see “Share Repurchases and Dividends” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , and Note 8, Shareholders’ Equity , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
The graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with the cumulative total return on the Standard & Poor's (“S&P”) 500 Index (“S&P 500”), of which we are a component, and the S&P 500 Consumer Discretionary Distribution & Retail Index (formerly the S&P 500 Retailing Group Industry Index), of which we are also a component.
The graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with the cumulative total return on the Standard & Poor's (“S&P”) 500 Index (“S&P 500”), of which we are a component, and the S&P 500 Consumer Discretionary Distribution & Retail Index, of which we are also a component.
The graph assumes an investment of $100 at the close of trading on February 1, 2019, the last trading day of fiscal 2019, in our common stock, the S&P 500 Index and the S&P 500 Consumer Discretionary Distribution & Retail Index.
The graph assumes an investment of $100 at the close of trading on January 30, 2021, the last trading day of fiscal 2021, in our common stock, the S&P 500 and the S&P 500 Consumer Discretionary Distribution & Retail Index.
In fiscal 2004, our Board of Directors (“Board”) initiated the payment of a regular quarterly cash dividend with respect to shares of our common stock. A quarterly cash dividend has been paid in each subsequent quarter. On February 29, 2024, we announced the Board’s approval of a 2% increase in the regularly quarterly cash dividend to $0.94 per share.
In fiscal 2004, our Board of Directors (“Board”) initiated the payment of a regular quarterly cash dividend with respect to shares of our common stock. A quarterly cash dividend has been paid in each subsequent quarter. On March 3, 2026, we announced the Board’s approval of a 1% increase in the regularly quarterly cash dividend to $0.96 per share.
Information regarding our repurchases of common stock during the fourth quarter of fiscal 2024 was as follows: Period Total Number ‎ of Shares ‎ Purchased Average Price ‎ Paid per Share Total Number of Shares ‎ Purchased as Part of Publicly ‎ Announced Program Approximate Dollar Value ‎ of Shares that May Yet Be ‎ Purchased Under the Program Oct. 29, 2023 through Nov. 25, 2023 952,139 $ 66.06 952,139 $ 3,784,000,000 Nov. 26, 2023 through Dec. 30, 2023 - $ - - $ 3,784,000,000 Dec. 31, 2023 through Feb. 3, 2024 - $ - - $ 3,784,000,000 Total fiscal 2024 fourth quarter 952,139 $ 66.06 952,139 $ 3,784,000,000 22 Best Buy Stock Comparative Performance Graph The information contained in this Best Buy Stock Comparative Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Information regarding our repurchases of common stock during the fourth quarter of fiscal 2026 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program Nov. 2, 2025 through Nov. 29, 2025 462,754 $ 76.96 462,754 $ 3,047,000,000 Nov. 30, 2025 through Jan. 3, 2026 498,167 $ 73.40 498,167 $ 3,011,000,000 Jan. 4, 2026 through Jan. 31, 2026 - $ - - $ 3,011,000,000 Total fiscal 2026 fourth quarter 960,921 $ 75.11 960,921 $ 3,011,000,000 25 Table of Contents Best Buy Stock Comparative Performance Graph The information contained in this Best Buy Stock Comparative Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Future dividend payments will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board. Holders As of March 13, 2024, there were 1,898 holders of record of our common stock.
Future dividend payments will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board. Holders As of March 16, 2026, there were 1,769 holders of record of our common stock. Purchases of Equity Securities by the Issuer and Affiliated Purchasers On February 28, 2022, our Board approved a $5.0 billion share repurchase authorization.
Source: Research Data Group, Inc. Ite m 6. [Reserved].
Source: Research Data Group, Inc. Item 6. [Reserved]. 26 Table of Contents
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Best Buy Co., Inc., the S&P 500 Index and the S&P 500 Consumer Discretionary Distribution & Retail Index Fiscal Years Ended February 2, 2019 February 1, 2020 January 30, 2021 January 29, 2022 January 28, 2023 February 3, 2024 Best Buy Co., Inc. $ 100.00 $ 148.97 $ 196.72 $ 181.12 $ 165.13 $ 154.14 S&P 500 $ 100.00 $ 121.68 $ 142.67 $ 175.90 $ 161.45 $ 195.06 S&P 500 Consumer Discretionary Distribution & Retail $ 100.00 $ 117.54 $ 166.19 $ 180.56 $ 147.66 $ 190.67 *Cumulative total return assumes dividend reinvestment.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Best Buy Co., Inc., the S&P 500 and the S&P 500 Consumer Discretionary Distribution & Retail Index Fiscal Years Ended January 30, 2021 January 29, 2022 January 28, 2023 February 3, 2024 February 1, 2025 January 31, 2026 Best Buy Co., Inc. $ 100.00 $ 92.07 $ 83.94 $ 78.35 $ 92.71 $ 74.07 S&P 500 $ 100.00 $ 123.29 $ 113.16 $ 136.72 $ 172.78 $ 201.03 S&P 500 Consumer Discretionary Distribution & Retail $ 100.00 $ 108.64 $ 88.85 $ 114.73 $ 161.20 $ 164.12 * Cumulative total return assumes dividend reinvestment.
Removed
During fiscal 2024, we repurchased and retired 4.7 million shares at a cost of $340 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+44 added−35 removed24 unchanged
Biggest changeInternational operating income rate decreased in fiscal 2024, primarily due to an unfavorable SG&A rate that was driven by decreased leverage from lower sales volume on our fixed expenses and an unfavorable gross profit rate. 28 Non-GAAP Financial Measures Reconciliations of operating income, effective tax rate and diluted EPS (GAAP financial measures) to non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted EPS (non-GAAP financial measures), respectively, were as follows ($ in millions, except per share amounts): 2024 2023 2022 Operating income $ 1,574 $ 1,795 $ 3,039 % of revenue 3.6 % 3.9 % 5.9 % Restructuring - inventory markdowns (1) - - (6) Intangible asset amortization (2) 61 86 82 Restructuring charges (3) 153 147 (34) Acquisition-related transaction costs (2) - - 11 Non-GAAP operating income $ 1,788 $ 2,028 $ 3,092 % of revenue 4.1 % 4.4 % 6.0 % Effective tax rate 23.5 % 20.7 % 19.0 % Intangible asset amortization (2) 0.1 % 0.1 % 0.1 % Restructuring charges (3) 0.2 % 0.2 % (0.1) % Non-GAAP effective tax rate 23.8 % 21.0 % 19.0 % Diluted EPS $ 5.68 $ 6.29 $ 9.84 Restructuring - inventory markdowns (1) - - (0.02) Intangible asset amortization (2) 0.28 0.38 0.33 Restructuring charges (3) 0.70 0.65 (0.14) Gain on sale of subsidiary, net (4) (0.10) - - Loss on investments 0.05 - - Acquisition-related transaction costs (2) - - 0.04 Income tax impact of non-GAAP adjustments (5) (0.24) (0.24) (0.04) Non-GAAP diluted EPS $ 6.37 $ 7.08 $ 10.01 For additional information regarding the nature of charges discussed below, refer to Note 2, Acquisitions ; Note 3, Restructuring ; Note 4, Goodwill and Intangible Assets ; and Note 11, Income Taxes , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
Biggest changeInternational segment adjusted operating income rate increased in fiscal 2026, primarily due to increased leverage from higher sales volumes, which resulted in a favorable adjusted SG&A rate, partially offset by an unfavorable gross profit rate. 33 Table of Contents Non-GAAP Financial Measures Reconciliations of consolidated SG&A, consolidated operating income, consolidated effective tax rate and consolidated diluted EPS (GAAP financial measures) to consolidated adjusted SG&A, consolidated adjusted operating income, consolidated adjusted effective tax rate and consolidated adjusted diluted EPS (non-GAAP financial measures), respectively, were as follows ($ in millions, except per share amounts): 2026 2025 2024 SG&A $ 7,623 $ 7,651 $ 7,876 % of revenue 18.3 % 18.4 % 18.1 % Intangible asset amortization (1) (14) (21) (61) Long-lived asset impairment (2) (21) - - Adjusted SG&A $ 7,588 $ 7,630 $ 7,815 % of revenue 18.2 % 18.4 % 18.0 % Operating income $ 1,389 $ 1,262 $ 1,574 % of revenue 3.3 % 3.0 % 3.6 % Intangible asset amortization (1) 14 21 61 Long-lived asset impairment (2) 21 - - Restructuring charges (3) 190 (3) 153 Goodwill and intangible asset impairments (2) 171 475 - Adjusted operating income $ 1,785 $ 1,755 $ 1,788 % of revenue 4.3 % 4.2 % 4.1 % Effective tax rate 24.0 % 28.7 % 23.5 % Intangible asset amortization (1) (0.1) % (0.6) % 0.1 % Long-lived asset impairment (2) (0.2) % - % - % Restructuring charges (3) 1.5 % 0.1 % 0.2 % Goodwill and intangible asset impairments (2) (0.4) % (4.9) % - % Adjusted effective tax rate 24.8 % 23.3 % 23.8 % Diluted EPS $ 5.04 $ 4.28 $ 5.68 Intangible asset amortization (1) 0.07 0.10 0.28 Long-lived asset impairment (2) 0.10 - - Restructuring charges (3) 0.90 (0.01) 0.70 Goodwill and intangible asset impairments (2) 0.81 2.19 - (Gain) loss on disposal of subsidiaries (4) 0.03 - (0.10) Loss on investments, net 0.03 0.03 0.05 Income tax impact of non-GAAP adjustments (5) (0.55) (0.22) (0.24) Adjusted diluted EPS $ 6.43 $ 6.37 $ 6.37 For additional information regarding the nature of charges discussed below, refer to Note 1, Summary of Significant Accounting Policies ; Note 2, Restructuring ; Note 3, Goodwill and Intangible Assets ; Note 4, Fair Value Measurements ; and Note 10, Income Taxes , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
(1) Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include agreements that are cancelable without penalty.
(1) Purchase obligations primarily include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include agreements that are cancelable without penalty.
Such estimates include the evaluation of historical recovery rates, as well as factors such as product type and condition, forecasted consumer demand, product lifecycles, promotional environment, vendor return rights and the expected sales channel of ultimate disposition. We also apply judgment in the assumptions about other components of net realizable value, such as vendor allowances and selling costs.
Such estimates include the evaluation of historical recovery rates, as well as factors such as product type and condition, forecasted consumer demand, product lifecycles, promotional environment, regulatory actions, vendor return rights and the expected sales channel of ultimate disposition. We also apply judgment in the assumptions about other components of net realizable value, such as vendor allowances and selling costs.
Financing Activities The decrease in cash used in financing activities in fiscal 2024 was primarily driven by lower share repurchases. Sources of Liquidity Funds generated by operating activities, available cash and cash equivalents, our credit facilities, other debt arrangements and trade payables are our most significant sources of liquidity.
Financing Activities The decrease in cash used in financing activities in fiscal 2026 was primarily driven by lower share repurchases. Sources of Liquidity Funds generated by operating activities, available cash and cash equivalents, our credit facilities, other debt arrangements and trade payables are our most significant sources of liquidity.
Our share repurchase plans are evaluated on an ongoing basis, considering factors such as our financial condition and cash flows, our economic outlook, the impact of tax laws, our liquidity needs and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on such factors.
Our share repurchase plans are evaluated on an ongoing basis, considering factors such as our financial condition and cash flows, our economic outlook, the impact of tax laws, our liquidity needs, our stock price, and the health and stability of global markets. The timing and amount of future repurchases may vary depending on such factors.
New Accounting Pronouncements For a description of applicable new accounting pronouncements, including our assessment of the impact on our financial statements, see Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
New Accounting Pronouncements For a description of applicable new or recently issued accounting pronouncements, including our assessment of the impact on our financial statements, see Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
As a result, our method of calculating comparable sales may not be the same as other retailers’ methods. Non-GAAP Financial Measures This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S.
As a result, our method of calculating comparable sales may not be the same as other retailers’ methods. 27 Table of Contents Non-GAAP Financial Measures This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S.
We use a combination of discounted cash flow (“DCF”) models and market data, such as revenue multiples and quoted market prices, for observable comparable companies. DCF models require detailed forecasts of cash flow drivers, such as revenue growth rates, margin rates and capital investments and estimates of weighted-average cost of capital rates.
We use a combination of discounted cash flow (“DCF”) analysis and market data, such as revenue multiples and quoted market prices, for observable comparable companies. DCF analysis requires detailed forecasts of cash flow drivers, such as revenue growth rates, margin rates and capital investments, and estimates of weighted-average cost of capital rates.
Refer to Note 8, Debt , in the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information about our outstanding debt. Share Repurchases and Dividends We repurchase our common stock and pay dividends pursuant to programs approved by our Board.
Refer to Note 7, Debt , in the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information about our outstanding debt. Share Repurchases and Dividends We repurchase our common stock and pay dividends pursuant to programs approved by our Board of Directors (“Board”).
We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores, websites and call centers versus the portion resulting from opening new stores or closing existing stores. The method of calculating comparable sales varies across the retail industry.
We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores and digital offerings versus the portion resulting from opening new stores or closing existing stores. The method of calculating comparable sales varies across the retail industry.
On April 12, 2023, we entered into a $1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks.
On April 18, 2025, we entered into a $1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks.
(5) Interest payments related to our 2028 Notes and 2030 Notes include the variable interest rate payments included in our interest rate swaps. Additionally, we have $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of February 3, 2024, which, if drawn upon, would be included in either short-term or long-term debt on our Consolidated Balance Sheets.
(4) Interest payments related to our 2028 Notes and 2030 Notes include the variable interest rate payments included in our interest rate swaps. Additionally, we have $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of January 31, 2026, which, if drawn upon, would be included in either short-term or long-term debt on our Consolidated Balance Sheets.
Rating Agency Rating Outlook Standard & Poor's BBB+ Stable Moody's A3 Stable Credit rating agencies review their ratings periodically, and, therefore, the credit rating assigned to us by each agency may be subject to revision at any time.
Rating Agency Rating Outlook S&P Global BBB+ Stable Moody's A3 Stable Credit rating agencies review their ratings periodically, and, therefore, the credit rating assigned to us by each agency may be subject to revision at any time.
To the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our effective income tax rate in a given financial statement period could be materially affected.
Effect if actual results differ from assumptions To the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our effective income tax rate in a given financial statement period could be materially affected.
The impairment test involves a comparison of the fair value of each reporting unit with its carrying value. Fair value reflects our estimate of the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction. We have goodwill in two reporting units – Best Buy Domestic (comprising our core U.S.
Fair value reflects our estimate of the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction. We have goodwill in two reporting units – Best Buy Domestic (comprising our core U.S.
Effect if actual results differ from assumptions A 10% change in our markdown adjustment as of February 3, 2024, would have affected net earnings by approximately $11 million in fiscal 2024. The level of markdown adjustments has remained relatively stable over the last three fiscal years.
Effect if actual results differ from assumptions A 10% change in our markdown adjustment as of January 31, 2026, would have affected net earnings by approximately $9 million in fiscal 2026. The level of markdown adjustments has remained relatively stable over the last three fiscal years.
We accomplish this by leveraging our combination of technology and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes. We have operations in the U.S. and Canada. We have two reportable segments: Domestic and International.
We accomplish this by leveraging our combination of tech expertise and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes. We have two reportable segments: Domestic and International.
We modify our approach to managing these variables as changes in our operating environment arise. For example, capital expenditures and share repurchases are a component of our cash flow and capital management strategy, which, to a large extent, we can adjust in response to economic and other changes in our business environment.
For example, capital expenditures and share repurchases are a component of our cash flow and capital management strategy, which, to a large extent, we can adjust in response to economic and other changes in our business environment.
Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill and intangible asset impairments, price-fixing settlements, gains and losses on sales of subsidiaries and certain investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items.
Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill and acquired intangible asset impairments, certain long-lived asset impairments, price-fixing settlements, gains and losses on disposals of subsidiaries and certain investments, amortization of definite-lived intangible assets associated with acquisitions, certain acquisition-related costs and the tax effect of all such items.
Best Buy business) and Best Buy Health – with carrying values of $492 million and $891 million, respectively, as of February 3, 2024. Judgments and uncertainties involved in the estimate Determining the fair value of a reporting unit requires complex analysis and judgment.
Best Buy business) and Best Buy Health – with carrying values of $492 million and $298 million, respectively, as of January 31, 2026. Judgments and uncertainties involved in the estimate Determining the fair value of a reporting unit requires complex analysis and judgment.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Op erations.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The Five-Year Facility Agreement replaced the previous $1.25 billion senior unsecured revolving credit facility (the “Previous Facility”) with a syndicate of banks, which was entered into in May 2021 and scheduled to expire in May 2026, but was terminated on April 12, 2023. The Five-Year Facility Agreement permits borrowings of up to $1.25 billion and expires in April 2028.
The Five-Year Facility Agreement replaced the previous $1.25 billion senior unsecured revolving credit facility (the “Previous Facility”), which was entered into April 2023 and scheduled to expire in April 2028, but was terminated on April 18, 2025. The Five-Year Facility Agreement permits borrowings of up to $1.25 billion and expires in April 2030.
The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, currenthealth.com, lively.com, techliquidators.com and yardbird.com.
The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Health, Best Buy Marketplace, Geek Squad, Imagine That, Insignia, Lively, Jitterbug, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, TechLiquidators and Yardbird; and the domain names bestbuy.com, lively.com, techliquidators.com and yardbird.com.
No adjustment is recorded for inventory that we expect to return to our vendors for full credit. Judgments and uncertainties involved in the estimate Markdown adjustments involve uncertainty because the calculations require management to make assumptions and to apply judgment about the expected revenue and incremental costs we will generate for selling current inventory.
Judgments and uncertainties involved in the estimate Markdown adjustments involve uncertainty because the calculations require management to make assumptions and to apply judgment about the expected revenue and incremental costs we will generate for selling current inventory.
As of February 3, 2024, we were in compliance with all financial covenants. If an event of default were to occur with respect to any of our other debt, it would likely constitute an event of default under the Five-Year Facility Agreement as well.
If an event of default were to occur with respect to any of our other debt, it would likely constitute an event of default under the Five-Year Facility Agreement as well.
Our credit ratings and outlook as of March 13, 2024, remained unchanged from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023, and are summarized below.
Our credit ratings and outlook as of March 16, 2026, remained unchanged from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025, and are summarized below.
Liquidity and Capital Resources We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment required to support our business strategies, the performance of our business, capital expenditures, dividends, credit facilities, short-term borrowing arrangements and working capital management.
Our liquidity requirements depend on key variables, including the level of investment required to support our business strategies, the performance of our business, capital expenditures, dividends, credit facilities, short-term borrowing arrangements and working capital management. We modify our approach to managing these variables as changes in our operating environment arise.
We currently expect capital expenditures in fiscal 2025 of $750 million to $800 million. Debt and Capital As of February 3, 2024, we had $500 million of principal amount of notes due October 1, 2028 (“2028 Notes”) and $650 million of principal amount of notes due October 1, 2030 (“2030 Notes”).
We currently expect capital expenditures in fiscal 2027 of approximately $750 million. Debt and Capital As of January 31, 2026, we had $500 million of principal amount of notes due October 1, 2028 (“2028 Notes”) and $650 million of principal amount of notes due October 1, 2030 ("2030 Notes").
Allowances for advertising and placement are recognized as a reduction of cost of sales ratably over the corresponding performance period. Funds that are determined to be a reimbursement of specific, incremental and identifiable costs incurred to sell a vendor's products are recorded as an offset to the related expense within SG&A when incurred.
Funds that are determined to be a reimbursement of specific, incremental and identifiable costs incurred to sell a vendor's products are recorded as an offset to the related expense within SG&A when incurred.
Factors that can affect our credit ratings include changes in our operating performance, the economic environment, conditions in the retail and consumer electronics industries, our financial position and changes in our business strategy.
Factors that can affect our credit ratings include, but are not limited to, changes in our operating performance; the economic environment, regulatory and political environment; conditions in the retail and consumer electronics industries; our competitive standing within the industries we operate; our financial position; and changes in our business strategy.
Refer to Note 3, Restructuring , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information.
Refer to Note 2, Restructuring , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information. Goodwill and intangible asset impairments in fiscal 2026 were related to Best Buy Health.
The International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Mobile and Geek Squad and the domain name bestbuy.ca. Our fiscal year ends on the Saturday nearest the end of January. Fiscal 2024, fiscal 2023 and fiscal 2022 ended February 3, 2024, January 28, 2023, and January 29, 2022, respectively.
Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Express, Best Buy Marketplace, Best Buy Mobile, Geek Squad, Insignia and TechLiquidators and the domain names bestbuy.ca and techliquidators.ca. Our fiscal year ends on the Saturday nearest the end of January.
We believe that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results. These estimates require our most difficult, subjective or complex judgments and generally incorporate significant uncertainty.
We believe that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results.
Inventory Markdown Description We value our inventory at the lower of cost or net realizable value through the establishment of inventory markdown adjustments. Markdown adjustments reflect the excess of cost over the net recovery we expect to realize from the ultimate sale or other disposal of inventory and establish a new cost basis.
Markdown adjustments reflect the excess of cost over the net recovery we expect to realize from the ultimate sale or other disposal of inventory and establish a new cost basis. No adjustment is recorded for inventory that we expect to return to our vendors for full credit.
Capital Expenditures Capital expenditures were as follows ($ in millions): 2024 2023 2022 E-commerce and information technology $ 496 $ 540 $ 549 Store-related projects (1) 278 355 178 Supply chain 21 35 10 Total capital expenditures $ 795 $ 930 $ 737 (1) Store-related projects are primarily comprised of store remodels and various merchandising projects.
Capital Expenditures Capital expenditures were as follows ($ in millions): 2026 2025 2024 E-commerce and information technology $ 463 $ 438 $ 496 Store-related projects (1) 200 230 278 Supply chain 41 38 21 Total capital expenditures $ 704 $ 706 $ 795 (1) Store-related projects are primarily comprised of store remodels and various merchandising projects.
Contractual obligations as of February 3, 2024, were as follows ($ in millions): Payments Due by Period Contractual Obligations Total Less Than ‎ 1 Year 1-3 Years 3-5 Years More Than ‎ 5 Years Purchase obligations (1) $ 3,181 $ 2,643 $ 337 $ 199 $ 2 Operating lease obligations (2)(3) 3,122 708 1,234 720 460 Long-term debt obligations (4) 1,150 - - 500 650 Interest payments (5) 218 46 81 70 21 Finance lease obligations (2) 39 16 16 4 3 Total $ 7,710 $ 3,413 $ 1,668 $ 1,493 $ 1,136 For additional information regarding the nature of contractual obligations discussed below, refer to Note 6, Derivative Instruments ; Note 7, Leases ; Note 8, Debt ; and Note 13, Contingencies and Commitments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
Contractual obligations as of January 31, 2026, were as follows ($ in millions): Payments Due by Period Contractual Obligations Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Purchase obligations (1) $ 3,209 $ 2,393 $ 476 $ 127 $ 213 Operating lease obligations (2) 3,347 739 1,297 769 542 Long-term debt obligations (3) 1,150 - 500 650 - Interest payments (4) 127 38 66 23 - Finance lease obligations 36 12 16 6 2 Total $ 7,869 $ 3,182 $ 2,355 $ 1,575 $ 757 For additional information regarding the nature of contractual obligations discussed below, refer to Note 5, Derivative Instruments ; Note 6, Leases ; Note 7, Debt ; and Note 12, Contingencies and Commitments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
Comparable sales is a metric used by management to evaluate the performance of our existing stores, websites and call centers by measuring the change in net sales for a particular period over the comparable prior period of equivalent length. Comparable sales includes revenue from stores, websites and call centers operating for at least 14 full months.
Comparable Sales Throughout this MD&A, we refer to comparable sales. Comparable sales is a metric used by management to evaluate the performance of our existing stores and digital offerings by measuring the change in net sales for a particular period over the comparable prior period of equivalent length.
Refer to Note 3, Restructuring , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information.
Refer to Note 3, Goodwill and Intangible Assets , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information. Operating income rate increased in fiscal 2026, primarily due to lower goodwill and intangible asset impairments, partially offset by higher restructuring charges.
Results of Operations Consolidated Results Selected consolidated financial data was as follows ($ in millions, except per share amounts): (1) 2024 2023 2022 Revenue $ 43,452 $ 46,298 $ 51,761 Revenue % change (6.1) % (10.6) % 9.5 % Comparable sales % change (6.8) % (9.9) % 10.4 % Gross profit $ 9,603 $ 9,912 $ 11,640 Gross profit as a % of revenue (1) 22.1 % 21.4 % 22.5 % SG&A $ 7,876 $ 7,970 $ 8,635 SG&A as a % of revenue (1) 18.1 % 17.2 % 16.7 % Restructuring charges $ 153 $ 147 $ (34) Operating income $ 1,574 $ 1,795 $ 3,039 Operating income as a % of revenue 3.6 % 3.9 % 5.9 % Net earnings $ 1,241 $ 1,419 $ 2,454 Diluted earnings per share $ 5.68 $ 6.29 $ 9.84 (1) Because retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers' corresponding rates.
Selected consolidated financial data was as follows ($ in millions, except per share amounts): 2026 2025 2024 Revenue $ 41,691 $ 41,528 $ 43,452 Revenue % change 0.4 % (4.4) % (6.1) % Comparable sales % change 0.5 % (2.3) % (6.8) % Gross profit $ 9,373 $ 9,385 $ 9,603 Gross profit as a % of revenue (1) 22.5 % 22.6 % 22.1 % SG&A $ 7,623 $ 7,651 $ 7,876 SG&A as a % of revenue (1) 18.3 % 18.4 % 18.1 % Restructuring charges $ 190 $ (3) $ 153 Goodwill and intangible asset impairments $ 171 $ 475 $ - Operating income $ 1,389 $ 1,262 $ 1,574 Operating income as a % of revenue 3.3 % 3.0 % 3.6 % Net earnings $ 1,069 $ 927 $ 1,241 Diluted EPS $ 5.04 $ 4.28 $ 5.68 (1) Because retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers' corresponding rates.
Effect if actual results differ from assumptions A 10% change in our vendor funding deferral as of February 3, 2024, would have affected net earnings by approximately $44 million in fiscal 2024.
Effect if actual results differ from assumptions A 10% change in our vendor funding deferral as of January 31, 2026, would have affected net earnings by approximately $45 million in fiscal 2026. The level of vendor funding deferral has remained relatively stable over the last three fiscal years.
If changes in our credit ratings were to occur, they could impact, among other things, interest costs for certain of our credit facilities, our future borrowing costs, access to capital markets, vendor financing terms and future new-store leasing costs. 30 Restricted Cash Our liquidity is also affected by restricted cash balances that are primarily restricted to cover product protection plans provided under our membership offerings and other self-insurance liabilities.
If changes in our credit ratings were to occur, they could impact, among other things, interest costs for certain of our credit facilities, our future borrowing costs, access to capital markets, vendor financing terms and future new-store leasing costs.
Domestic segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows: Revenue Mix Summary Comparable Sales Summary 2024 2023 2024 2023 Computing and Mobile Phones 42 % 43 % (7.8) % (12.0) % Consumer Electronics 30 % 30 % (8.6) % (12.2) % Appliances 14 % 15 % (15.1) % (5.7) % Entertainment 7 % 6 % 9.7 % (5.5) % Services 6 % 5 % 8.7 % (2.5) % Other 1 % 1 % 6.1 % 1.6 % Total 100 % 100 % (7.1) % (10.3) % 26 Notable comparable sales changes by revenue category were as follows: • Computing and Mobile Phones: The 7.8% comparable sales decline was driven primarily by computing, mobile phones and tablets. • Consumer Electronics: The 8.6% comparable sales decline was driven primarily by home theater. • Appliances: The 15.1% comparable sales decline was driven primarily by large appliances. • Entertainment: The 9.7% comparable sales growth was driven primarily by gaming hardware. • Services: The 8.7% comparable sales growth was driven primarily by growth in our membership programs, as well as delivery and installation services.
Domestic segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows: Revenue Mix Comparable Sales 2026 2025 2026 2025 Computing and Mobile Phones 47 % 45 % 5.7 % 3.4 % Consumer Electronics 28 % 29 % (5.4) % (5.2) % Appliances 11 % 12 % (8.9) % (14.8) % Entertainment 7 % 7 % 6.8 % (11.9) % Services 6 % 6 % 1.0 % 8.4 % Other 1 % 1 % (6.3) % 15.9 % Total 100 % 100 % 0.4 % (2.5) % Notable comparable sales changes by revenue category were as follows: • Computing and Mobile Phones: The 5.7% comparable sales growth was driven primarily by laptops, mobile phones and desktops. • Consumer Electronics: The 5.4% comparable sales decline was driven primarily by home theater. • Appliances: The 8.9% comparable sales decline was driven primarily by large appliances. • Entertainment: The 6.8% comparable sales growth was driven primarily by gaming, partially offset by a comparable sales decline in drones. • Services: The 1.0% comparable sales growth was driven primarily by Best Buy Marketplace and Best Buy Ads, partially offset by a comparable sales decline in our Best Buy Health service offerings.
Revenue from acquisitions is included in comparable sales beginning with the first full quarter following the first anniversary of the date of the acquisition. Comparable sales also includes credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable.
Revenue from acquisitions is included in comparable sales beginning with the first full quarter following the first anniversary of the date of the acquisition.
These decreases were partially offset by positive cash flows from operations, primarily driven by earnings. Our cash deposits held at financial institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit.
Our cash deposits held at financial institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit. We limit exposure relating to financial instruments by diversifying the financial instruments among various counterparties, which consist primarily of major financial institutions.
International segment stores open at the end of each of the last three fiscal years were as follows: 2022 2023 2024 Total Stores ‎ at End of ‎ Fiscal Year Stores ‎ Opened Stores ‎ Closed Total Stores ‎ at End of ‎ Fiscal Year Stores ‎ Opened Stores ‎ Closed Total Stores ‎ at End of ‎ Fiscal Year Canada Best Buy 127 - - 127 1 - 128 Best Buy Mobile 33 - - 33 - (1) 32 Total International segment stores 160 - - 160 1 (1) 160 27 International segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows: Revenue Mix Summary Comparable Sales Summary 2024 2023 2024 2023 Computing and Mobile Phones 46 % 45 % (0.9) % (6.1) % Consumer Electronics 29 % 30 % (9.3) % (6.2) % Appliances 10 % 10 % (4.5) % 0.3 % Entertainment 9 % 8 % 13.2 % (8.6) % Services 5 % 5 % 1.0 % (2.1) % Other 1 % 2 % (33.8) % 1.1 % Total 100 % 100 % (3.2) % (5.4) % Notable comparable sales changes by revenue category were as follows: • Computing and Mobile Phones : The 0.9% comparable sales decline was driven primarily by computing, partially offset by comparable sales growth in mobile phones. • Consumer Electronics: The 9.3% comparable sales decline was driven primarily by home theater and health and fitness. • Appliances: The 4.5% comparable sales decline was driven primarily by large appliances. • Entertainment: The 13.2% comparable sales growth was driven primarily by gaming hardware. • Services: The 1.0% comparable sales growth was driven primarily by growth in our membership programs.
International segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows: Revenue Mix Comparable Sales 2026 2025 2026 2025 Computing and Mobile Phones 49 % 48 % 5.5 % 3.4 % Consumer Electronics 27 % 28 % (0.1) % (3.3) % Appliances 9 % 10 % (5.1) % (0.9) % Entertainment 8 % 8 % (0.6) % (13.3) % Services 6 % 5 % 5.2 % 5.3 % Other 1 % 1 % (6.3) % (11.0) % Total 100 % 100 % 2.3 % 0.5 % Notable comparable sales changes by revenue category were as follows: • Computing and Mobile Phones: The 5.5% comparable sales growth was driven primarily by computing and mobile phones. • Consumer Electronics: The 0.1% comparable sales decline was driven primarily by home theater and smart home, partially offset by comparable sales growth in digital imaging and health and fitness. • Appliances: The 5.1% comparable sales decline was driven by small and large appliances. • Entertainment: The 0.6% comparable sales decline was driven primarily by virtual reality and drones, partially offset by comparable sales growth in gaming. • Services: The 5.2% comparable sales growth was driven primarily by growth in marketplace and our membership programs.
As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open. In fiscal 2025, we currently expect to close approximately 10 to 15 Best Buy stores.
We continuously monitor store performance as part of a market-driven, omnichannel strategy. As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open. We currently expect to increase our Domestic segment Best Buy store count by approximately 4 stores by the end of fiscal 2027.
Cash Flows Cash flows were as follows ($ in millions): 2024 2023 2022 Total cash provided by (used in): Operating activities $ 1,470 $ 1,824 $ 3,252 Investing activities (781) (962) (1,372) Financing activities (1,144) (1,806) (4,297) Effect of exchange rate changes on cash (5) (8) (3) Decrease in cash, cash equivalents and restricted cash $ (460) $ (952) $ (2,420) Operating Activities The decrease in cash provided by operating activities in fiscal 2024 was primarily due to the timing and volume of inventory purchases and payments, higher income tax payments and lower earnings.
Cash Flows Cash flows were as follows ($ in millions): 2026 2025 2024 Total cash provided by (used in): Operating activities $ 1,962 $ 2,098 $ 1,470 Investing activities (730) (704) (781) Financing activities (1,083) (1,309) (1,144) Effect of exchange rate changes on cash 6 (10) (5) Increase (decrease) in cash, cash equivalents and restricted cash $ 155 $ 75 $ (460) Operating Activities The decrease in cash provided by operating activities in fiscal 2026 was primarily driven by cash outflows from accounts payable due to the timing of inventory purchases and payments.
For these reasons, internal management reporting, including budgets, forecasts and financial targets used for short-term incentives are based on non-GAAP financial measures.
We believe that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, provide additional useful information for evaluating current period performance and assessing future performance. For these reasons, internal management reporting, including budgets, forecasts and financial targets used for short-term incentives are based on non-GAAP financial measures.
Unless otherwise noted, references to years in the MD&A section of this report relate to fiscal years, and not calendar years. Fiscal 2024 included 53 weeks with the 53 rd week occurring in the fiscal fourth quarter. Fiscal 2023 and fiscal 2022 each included 52 weeks. Our business, like that of many retailers, is seasonal.
Unless otherwise noted, references to years within the MD&A section of this report relate to fiscal years, not calendar years. Our business, like that of many retailers, is seasonal. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season.
International gross profit rate decreased in fiscal 2024, primarily driven by lower product margin rates, partially offset by a higher mix of revenue from the higher-margin services category. International SG&A increased in fiscal 2024, primarily due to higher incentive compensation expense and the impact of the 53 rd week, partially offset by the favorable impact of foreign currency exchange rates.
International segment gross profit rate decreased in fiscal 2026, primarily due to lower product margin rates and unfavorable supply chain costs, partially offset by marketplace growth. International segment adjusted SG&A decreased in fiscal 2026, primarily due to lower employee compensation expense, including incentive compensation, and the favorable impact of foreign exchange rates.
Vendor Allowances Description We receive funds from our merchandise vendors through a variety of programs and arrangements, primarily in the form of purchases-based or sales-based volumes and for product advertising and placement . We recognize allowances based on purchases and sales as a reduction of cost of sales when the associated inventory is sold.
These estimates require our most difficult, subjective or complex judgments and generally incorporate significant uncertainty. 37 Table of Contents Vendor Allowances Description We receive funds from our merchandise vendors through a variety of programs and arrangements, primarily in the form of purchases-based or sales-based volumes and for product advertising and placement.
Additionally, although they do not contain legally binding purchase commitments, we included open purchase orders in the table above. Substantially all open purchase orders are fulfilled within 30 days. (2) Lease obligations exclude $118 million of legally binding fixed costs for leases signed but not yet commenced .
Additionally, although they do not contain legally binding purchase commitments, we include open purchase orders in the table above. Substantially all open purchase orders are fulfilled within 30 days. (2) Operating lease obligations exclude payments to landlords covering real estate taxes and common area maintenance.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended January 28, 2023, for discussion of the results of operations for the year ended January 28, 2023, compared to the year ended January 29, 2022, which is incorporated by reference herein. 23 Overview We are driven by our purpose to enrich lives through technology and our vision to personalize and humanize technology solutions for every stage of life .
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended February 1, 2025 , for discussion of the results of operations for the year ended February 1, 2025, compared to the year ended February 3, 2024, which is incorporated by reference herein.
Revenue from stores closed more than 14 days, including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters, is excluded from comparable sales until at least 14 full months after reopening.
Comparable sales excludes revenue from stores closed more than 14 days (including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters) until at least 14 full months after reopening; the impact of certain periodic warranty-related profit-share revenue; the effect of fluctuations in foreign currency exchange rates (applicable to our International segment only); and the impact of the 53 rd week (applicable in 53-week fiscal years only).
Cash and cash equivalents were as follows ($ in millions): February 3, 2024 January 28, 2023 Cash and cash equivalents $ 1,447 $ 1,874 29 The decrease in cash and cash equivalents in fiscal 2024 was primarily driven by dividend payments, capital expenditures and share repurchases .
Cash and cash equivalents were as follows ($ in millions): January 31, 2026 February 1, 2025 Cash and cash equivalents $ 1,738 $ 1,578 The increase in cash and cash equivalents in fiscal 2026 was primarily driven by positive operating cash flows from earnings. The increase was partially offset by dividend payments, capital expenditures and share repurchases.
Such assumptions can include complex and uncertain external factors, such as changes in tax law, interpretations of tax law and the timing of such changes, and uncertain internal factors such as taxable earnings by jurisdiction, the magnitude and timing of certain transactions and capital spending. 33 Effect if actual results differ from assumptions Although we believe that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material.
Such assumptions can include complex and uncertain external factors, such as changes in tax law, interpretations of tax law and the timing of such changes, and uncertain internal factors such as taxable earnings by jurisdiction, the magnitude and timing of certain transactions and capital spending.
We allocate the transaction price to all performance obligations identified in the contract based on their relative fair value. For performance obligations provided over the term of the contract, we typically recognize revenue on a usage basis, an input method of measuring progress over the related contract term.
For performance obligations provided over the term of the contract, we typically recognize revenue on a usage basis, an input method of measuring progress over the related contract term. This method involves the estimation of expected usage patterns, primarily derived from historical information.
We currently expect to spend approximately $350 million on share repurchases in fiscal 2025. Cash dividends declared and paid increased in fiscal 2024, primarily due to an increase in the regular quarterly cash dividend per share, partially offset by fewer shares outstanding.
Cash dividends declared and paid decreased in fiscal 2026, due to fewer shares outstanding, partially offset by an increase in the regular quarterly cash dividend per share. Off-Balance-Sheet Arrangements and Contractual Obligations We do not have outstanding off-balance-sheet arrangements.
The level of vendor funding deferral has remained relatively stable over the last three fiscal years. 32 Goodwill Description Goodwill is evaluated for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable.
Goodwill Description Goodwill is evaluated for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. The impairment test involves a comparison of the fair value of each reporting unit with its carrying value.
Barring a fundamental, material deterioration of macroeconomic factors, we believe the risk of future goodwill impairment within our Best Buy Domestic reporting unit is remote. Our Best Buy Health reporting unit is subject to a greater level of uncertainty, since it operates in a less mature, rapidly-changing and high-growth environment.
Barring a fundamental, material deterioration of macroeconomic factors, we believe the risk of future goodwill impairment within our Best Buy Domestic reporting unit is remote. In the third quarter of fiscal 2026, we recorded a goodwill impairment of $118 million within the Domestic segment for the Best Buy Health reporting unit.
These estimates incorporate many uncertain factors, such as the effectiveness of our strategy, changes in customer behavior, technological changes, competitor actions, regulatory changes and macroeconomic trends. Effects if actual results differ from assumptions For our Best Buy Domestic reporting unit, fair value exceeded book value by a substantial margin in fiscal 2024 and fiscal 2023.
These estimates incorporate many uncertain factors, such as the effectiveness of our strategy, changes in customer behavior, technological changes, competitor actions, regulatory changes and macroeconomic trends.
(3) Represents restructuring charges primarily related to the Fiscal 2024 Restructuring Initiative, the Fiscal 2023 Resource Optimization Initiative and the Mexico Exit and Strategic Realignment. (4) Represents the gain on sale of a Mexico subsidiary subsequent to our exit from operations in Mexico. (5) The non-GAAP adjustments primarily relate to the U.S.
Charges in fiscal 2024 primarily related to an enterprise-wide restructuring initiative that commenced in the fourth quarter of fiscal 2024. (4) Primarily represents charges incurred related to the exit of a component of our Best Buy Health business in fiscal 2026 and the disposal of a Mexico subsidiary in fiscal 2024. (5) The non-GAAP adjustments primarily relate to the U.S.
Share repurchase and dividend activity were as follows ($ and shares in millions, except per share amounts): 2024 2023 2022 Total cost of shares repurchased $ 340 $ 1,001 $ 3,504 Average price per share $ 72.52 $ 84.78 $ 108.97 Total number of shares repurchased 4.7 11.8 32.2 Regular quarterly cash dividends per share $ 3.68 $ 3.52 $ 2.80 Cash dividends declared and paid $ 801 $ 789 $ 688 The total cost of shares repurchased decreased in fiscal 2024 from decreases in the volume of repurchases and the average price per share.
There is no expiration date governing the period over which we can repurchase shares under this authorization. 36 Table of Contents Share repurchase and dividend activity were as follows ($ and shares in millions, except per share amounts): 2026 2025 2024 Total cost of shares repurchased $ 273 $ 500 $ 340 Average price per share $ 69.18 $ 86.42 $ 72.52 Total number of shares repurchased 4.0 5.8 4.7 Regular quarterly cash dividend per share $ 3.80 $ 3.76 $ 3.68 Cash dividends declared and paid $ 801 $ 807 $ 801 The total cost of shares repurchased decreased in fiscal 2026 due to decreases in the volume of repurchases and the average price per share.
Segment Performance Summary Domestic Segment Selected financial data for the Domestic segment was as follows ($ in millions): 2024 2023 2022 Revenue $ 40,097 $ 42,794 $ 47,830 Revenue % change (6.3) % (10.5) % 10.5 % Comparable sales % change (1) (7.1) % (10.3) % 11.0 % Gross profit $ 8,850 $ 9,106 $ 10,702 Gross profit as a % of revenue 22.1 % 21.3 % 22.4 % SG&A $ 7,236 $ 7,332 $ 7,946 SG&A as a % of revenue 18.0 % 17.1 % 16.6 % Restructuring charges $ 147 $ 140 $ (39) Operating income $ 1,467 $ 1,634 $ 2,795 Operating income as a % of revenue 3.7 % 3.8 % 5.8 % Selected Online Revenue Data Total online revenue $ 13,102 $ 14,212 $ 16,430 Online revenue as a % of total segment revenue 32.7 % 33.2 % 34.4 % Comparable online sales % change (1) (7.8) % (13.5) % (12.0) % (1) Comparable online sales are included in the comparable sales calculation.
See Note 2, Restructuring , of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for additional information. 31 Table of Contents Segment Performance Summary Domestic Segment Selected financial data for the Domestic segment was as follows ($ in millions): 2026 2025 2024 Revenue $ 38,278 $ 38,238 $ 40,097 Revenue % change 0.1 % (4.6) % (6.3) % Comparable sales % change (1) 0.4 % (2.5) % (7.1) % Gross profit $ 8,636 $ 8,647 $ 8,850 Gross profit as a % of revenue 22.6 % 22.6 % 22.1 % Adjusted SG&A (2) $ 6,966 $ 7,000 $ 7,175 Adjusted SG&A as a % of revenue (3) 18.2 % 18.3 % 17.9 % Adjusted operating income (2) $ 1,670 $ 1,647 $ 1,675 Adjusted operating income as a % of revenue (4) 4.4 % 4.3 % 4.2 % Selected Online Revenue Data Total online revenue $ 13,166 $ 12,994 $ 13,102 Online revenue as a % of total segment revenue 34.4 % 34.0 % 32.7 % Comparable online sales % change (1) 1.3 % (0.8) % (7.8) % (1) Comparable online sales are included in the comparable sales calculation.
(3) Operating lease obligations exclude payments to landlords covering real estate taxes and common area maintenance. These charges, if included, would increase total operating lease obligations by $0.7 billion as of February 3, 2024. (4) Long-term debt obligations represent principal amounts only and exclude interest rate swap valuation adjustments.
These charges, if included, would increase total operating lease obligations by $0.8 billion as of January 31, 2026. Operating lease obligations also exclude $22 million of legally binding fixed costs for leases signed but not yet commenced. (3) Long-term debt obligations represent principal amounts only and exclude interest rate swap valuation adjustments.
Effect if actual results differ from assumptions A 10% change in the amount of services membership deferred revenue as of February 3, 2024, would have affected net earnings by approximately $44 million in fiscal 2024.
When insufficient reliable and relevant history is available to estimate usage, we generally recognize revenue ratably over the life of the contract until such history has accumulated. 39 Table of Contents Effect if actual results differ from assumptions A 10% change in the amount of services membership deferred revenue as of January 31, 2026, would have affected net earnings by approximately $42 million in fiscal 2026.
International Segment Selected financial data for the International segment was as follows ($ in millions): 2024 2023 2022 Revenue $ 3,355 $ 3,504 $ 3,931 Revenue % change (4.3) % (10.9) % (1.0) % Comparable sales % change (3.2) % (5.4) % 3.3 % Gross profit $ 753 $ 806 $ 938 Gross profit as a % of revenue 22.4 % 23.0 % 23.9 % SG&A $ 640 $ 638 $ 689 SG&A as a % of revenue 19.1 % 18.2 % 17.5 % Restructuring charges $ 6 $ 7 $ 5 Operating income $ 107 $ 161 $ 244 Operating income as a % of revenue 3.2 % 4.6 % 6.2 % International revenue was $3.4 billion in fiscal 2024, including approximately $60 million of revenue from the 53 rd week.
International Segment Selected financial data for the International segment was as follows ($ in millions): 2026 2025 2024 Revenue $ 3,413 $ 3,290 $ 3,355 Revenue % change 3.7 % (1.9) % (4.3) % Comparable sales % change 2.3 % (0.5) % (3.2) % Gross profit $ 737 $ 738 $ 753 Gross profit as a % of revenue 21.6 % 22.4 % 22.4 % Adjusted SG&A (1) $ 622 $ 630 $ 640 Adjusted SG&A as a % of revenue (2) 18.2 % 19.1 % 19.1 % Adjusted operating income (1) $ 115 $ 108 $ 113 Adjusted operating income as a % of revenue (3) 3.4 % 3.3 % 3.4 % (1) Represents segment Adjusted SG&A and segment Adjusted operating income in accordance with ASC 280, Segment Reporting .
(1) Represents inventory markdowns and subsequent adjustments recorded within cost of sales associated with the exit from operations in Mexico. (2) Represents charges associated with acquisitions, including: (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology; and (2) acquisition-related transaction and due diligence costs, primarily comprised of professional fees.
(1) Represents the non-cash amortization of definite-lived intangible assets associated with acquisitions, including customer relationships, tradenames and developed technology assets. (2) Represents charges incurred related to Best Buy Health, comprised of non-cash impairments of goodwill, intangible assets and certain long-lived assets.
As such, the income tax charge on the U.S. non-GAAP adjustments is calculated using the U.S. statutory tax rate of 24.5%. Non-GAAP operating income rate decreased in fiscal 2024, primarily due to unfavorable SG&A rates in our Domestic and International segments, partially offset by a favorable gross profit rate in our Domestic segment.
As such, the income tax on a portion of the U.S. non-GAAP adjustments is calculated using the statutory tax rate of 24.5%.
We believe the disclosure of revenue changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates.
We believe the disclosure of revenue changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates. Refer to the Non-GAAP Financial Measures section below for detailed reconciliations of items impacting consolidated adjusted SG&A, consolidated adjusted operating income, consolidated adjusted effective tax rate and consolidated adjusted diluted EPS in the presented periods.
See Note 11, Income Taxes , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information. Service Revenue Description We sell membership plans that include access to benefits such as technical support, price discounts on certain products and services and product protection plans.
Service Revenue Description We sell membership plans that include access to benefits such as technical support, price discounts on certain products and services and product protection plans. We allocate the transaction price to all performance obligations identified in the contract based on their relative fair value.
(“GAAP”), as well as certain adjusted or non-GAAP financial measures, such as non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted earnings per share (“EPS”). We believe that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, provide additional useful information for evaluating current period performance and assessing future performance.
(“GAAP”), as well as certain non-GAAP financial measures, such as consolidated adjusted selling, general and administrative expenses (“SG&A”), consolidated adjusted SG&A rate, consolidated adjusted operating income, consolidated adjusted operating income rate, consolidated adjusted effective tax rate and consolidated adjusted diluted earnings per share (“EPS”).
The decrease in International revenue in fiscal 2024 was primarily driven by comparable sales declines across most of our product categories and the negative impact from unfavorable foreign currency exchange rates.
International segment revenue increased in fiscal 2026, primarily driven by revenue from Best Buy Express locations excluded from comparable sales and comparable sales growth primarily driven by computing and mobile phones, partially offset by the negative impact of foreign exchange rates.
On February 28, 2022, our Board approved a $5.0 billion share repurchase program, which replaced the $5.0 billion share repurchase program authorized on February 16, 2021. There is no expiration date governing the period over which we can repurchase shares under this authorization.
On February 28, 2022, our Board approved a $5.0 billion share repurchase program.
Domestic revenue was $40.1 billion in fiscal 2024, including approximately $675 million of revenue from the 53 rd week. The decrease in Domestic revenue in fiscal 2024 was primarily driven by comparable sales declines in home theater, large appliances, computing and mobile phones, partially offset by comparable sales growth in gaming hardware.
(4) Adjusted operating income as a % of revenue is calculated as Domestic segment Adjusted operating income divided by Domestic segment Revenue. Domestic segment revenue increased slightly in fiscal 2026, primarily driven by comparable sales growth in computing, gaming and mobile phones, mostly offset by comparable sales declines in home theater and appliances.
Further declines in the excess of fair value over book value could arise in future years, which could lead to an impairment of goodwill. Factors that drive this uncertainty include macro-economic conditions, the regulatory environment, competitor actions, technology changes and trends in the health and care sectors.
Our Best Buy Health reporting unit is subject to a greater level of uncertainty compared to our Best Buy Domestic reporting unit, since it operates in a more uncertain environment. Factors that drive this uncertainty include macro-economic conditions, the regulatory environment, government funding programs, competitor actions, technology changes and other trends in the health and care sectors.
Restricted cash, which is included in Other current assets on our Consolidated Balance Sheets, remained relatively stable in fiscal 2024, with balances of $346 million and $379 million as of February 3, 2024, and January 28, 2023, respectively.
Restricted Cash Our liquidity is also affected by restricted cash balances that are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities. Restricted cash, which is included in Other current assets on our Consolidated Balance Sheets, was $285 million and $290 million as of January 31, 2026, and February 1, 2025, respectively.
Online revenue of $13.1 billion decreased 7.8% on a comparable basis in fiscal 2024. These decreases in revenue were primarily due to the factors described within the Consolidated Results section, above.
Online revenue of $13.2 billion increased 1.3% on a comparable basis in fiscal 2026.
International restructuring charges incurred in fiscal 2024 were primarily comprised of employee termination benefits related to the enterprise-wide initiative that commenced in the fourth quarter of fiscal 2024.
Restructuring charges in fiscal 2026 were primarily related to a labor and store optimization restructuring initiative that commenced in the second quarter of fiscal 2026 and a restructuring initiative focused on optimizing our Best Buy Health business that commenced in the first quarter of fiscal 2026.
Removed
A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Comparable Sales Throughout this MD&A, we refer to comparable sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring fiscal 2024, foreign currency exchange rate fluctuations were primarily driven by the strength of the U.S. dollar compared to the Canadian dollar compared to the prior-year period, which had a negative overall impact on our revenue as this foreign currency revenue translated into less U.S. dollars.
Biggest changeDuring fiscal 2026, foreign currency exchange rate fluctuations were primarily driven by the strength of the U.S. dollar against the Canadian dollar compared to the prior-year period. We estimate that the foreign currency exchange rate fluctuations had an unfavorable impact on our revenue of approximately $16 million in fiscal 2026.
Our primary objective in holding derivatives is to reduce the volatility of net earnings and cash flows, as well as net asset value associated with changes in foreign currency exchange rates. Our foreign currency risk management strategy includes both hedging instruments and derivatives that are not designated as hedging instruments.
Our primary objective in holding derivatives is to reduce the volatility of net earnings and cash flows, as well as to reduce the volatility of net asset value associated with changes in foreign currency exchange rates. Our foreign currency risk management strategy includes both hedging instruments and derivatives that are not designated as hedging instruments.
Our cash, cash equivalents and restricted cash generate interest income that will vary based on changes in short-term interest rates. In addition, we have swapped a portion of our fixed-rate debt to floating rate such that the interest expense on this debt will vary with short-term interest rates.
Certain cash, cash equivalents and restricted cash generate interest income that will vary based on changes in short-term interest rates. In addition, we have swapped a portion of our fixed-rate debt to floating rate such that the interest expense on this debt will vary with short-term interest rates.
Refer to Note 6, Derivative Instruments , and Note 8, Debt , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding our interest rate swaps.
Refer to Note 5, Derivative Instruments , and Note 7, Debt , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding our interest rate swaps.
Refer to Note 6, Derivative Instruments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding these instruments.
Refer to Note 1, Summary of Significant Accounting Policies , and Note 5, Derivative Instruments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding these instruments.
As of February 3, 2024, we had $1.8 billion of cash, cash equivalents and restricted cash and $0.5 billion of debt that has been swapped to floating rate, and therefore the net asset balance exposed to interest rate changes was $1.3 billion.
As of January 31, 2026, we had $2.0 billion of cash, cash equivalents and restricted cash and $0.5 billion of debt that has been swapped to floating rate, and therefore the net asset balance exposed to interest rate changes was $1.5 billion.
As of February 3, 2024, a 50-basis point increase in short-term interest rates would have led to an estimated $6 million increase in interest income, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated $6 million decrease in interest income.
As of January 31, 2026, a 50-basis point increase in short-term interest rates would have led to an estimated $8 million increase in interest income, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated $8 million decrease in interest income in fiscal 2026.
We estimate that foreign currency exchange rate fluctuations had an unfavorable impact on our revenue of approximately $90 million. The impact of foreign exchange rate fluctuations on our net earnings in fiscal 2024 was not significant. ‎ 34
The estimated impact of foreign exchange rate fluctuations on our net earnings in fiscal 2026 was not significant. 40 Table of Contents

Other BBY 10-K year-over-year comparisons