BEST BUY CO Q1 FY27 earnings call BBY

Enterprise comparable sales grew 2% in Q1, ahead of the ~1% outlook, with positive comps across the majority of major product categories. The quarter accelerated by month — down ~1% in February, +3% in March and +4% in April — driven by new product introductions and customers spending higher tax refunds with Best Buy, most of which landed in March and April. Domestic comp was +1.8% and international comp was +4.7%. Management said May started strong at high-single-digit month-to-date growth through Memorial Day.

Gaming was stronger than expected across Switch 2, PS5 and Xbox, supported by software titles like Pokemon (title name ASR-garbled as 'Pokemon Pocopia'). Computing delivered its ninth consecutive quarter of positive comps, aided by Best Buy business growth of 15%, and mobile phones posted a fifth straight quarter of growth on expanded carrier partnerships and new phone launches. TV/home theater sales were still down slightly YoY but showed material improvement with unit and market-share gains across tiers. Appliances continued to decline on a stagnant housing market and competitive pricing, though management cited month-to-date demand growth in May.

Domestic marketplace GMV reached approximately $250M in Q1; including it, domestic sales growth was more than 4%. Both marketplace and Best Buy Ads exceeded performance targets and each delivered positive contribution to gross profit rate. For the full year, management expects ad collections to grow 10% to nearly $1B and U.S. marketplace GMV of at least $1.2B, and framed the company's repositioning as a 'retail media, advertising and technology company.'

Rising memory costs mostly affect computing, where product price increases are flowing into the assortment. Q1 blended computing ASP was flat YoY due to product mix and staggered price implementation, but management expects it to rise in Q2/Q3 with muted unit elasticity given assortment breadth. Best Buy pulled forward^📎 computing supply at lower costs, driving inventory up almost 8% and accounts payable up almost 10% versus last year; management sees no material inventory supply constraints for the rest of FY27 and no evidence of consumers pulling forward purchases.

Starting this summer, Best Buy will grow its footprint with medium (20,000-25,000 sq ft) and small (12,000-15,000 sq ft) formats to reach new and underserved markets, expecting net store additions this year for the first time in a long time. In larger stores, empty space is being consolidated in ~70 stores: 50 will house 900-sq-ft branded 'Meta Labs at Best Buy' (AI glasses and VR) staffed by dedicated specialists, and 20 will hold Yardbird outdoor furniture or outlet assortment, with hundreds more stores as future candidates.

Corie Barry announced she is stepping down as CEO after seven years, with Jason Bonfig — currently Chief Customer, Product and Fulfillment Officer and a 27-year Best Buy veteran — officially assuming the role on November 1. The two are transitioning side-by-side until then. Bonfig laid out four priorities: advancing Best Buy as a retail media, advertising and technology company; expanding reach via marketplace and partnerships; elevating the customer experience; and remaining a human-powered, customer-focused company.

Best Buy is the importer of record for only about 2-3% of what it sells, so its tariff-refund exposure is small in the context of sales. The company is complying with Phase 1 of the refund process and stated that any recovery of duties will be used to deliver value back to customers, with plans to work with vendors over the coming months. Management drew a parallel to the memory situation, noting price adjustments are a last resort and did not result in overall blended enterprise ASP increases.