Best Buy FY 2026 results: revenue steady, EPS under pressure as margins stay thin

Best Buy (BBY) has reported third quarter FY 2026 results with revenue of US$9.7b and basic EPS of US$0.66, setting the tone for a year where earnings quality is very much in focus. Over the past three quarters of FY 2026, revenue has ranged from US$8.8b to US$9.7b while basic EPS moved from US$0.95 in Q1 to US$0.88 in Q2 and US$0.66 in Q3, alongside same store sales trends that went from a 0.7% decline in Q1 to growth of 1.6% in Q2 and 2.7% in Q3. This puts the spotlight on how sustainable any improvement in store performance might be given the pressure on margins.

See our full analysis for Best Buy.

With the headline numbers on the table, the next step is to stack these results against the main stories investors have been telling about Best Buy, and see which narratives around growth, margins and risks still hold up and which start to look out of line with the data.

Same store sales improve while profitability stays tight

• Same store sales moved from a 0.7% decline in Q1 FY 2026 to growth of 1.6% in Q2 and 2.7% in Q3, while quarterly net income over the same period went from US$202 million to US$186 million to US$140 million, indicating healthier store traffic but thinner profit per dollar of sales.
• What stands out for the bullish narrative is that, even though bulls expect margin improvement over time, the latest trailing net margin of 1.5% compared with 3% a year earlier remains well below their assumption that margins rise toward about 3.5%. This means:
  • The recent pattern of Q1 to Q3 net income (US$202 million, US$186 million, US$140 million) currently leans more toward compression than the margin lift bulls are looking for.
  • Bulls point to new profit streams like Best Buy Marketplace and Best Buy Ads as potential future margin drivers, yet the present 1.5% trailing margin underlines how much improvement would be needed to reach those higher margin targets.

Have a look at how optimistic investors frame this margin story versus the current numbers in the 🐂 Best Buy Bull Case.

Trailing earnings hit by one off loss and thinner margins

• Over the last 12 months, net profit margin is reported at 1.5%, down from 3% a year earlier. That figure includes a one off loss of US$882.0 million that weighs on trailing earnings quality.
• Bears focus on risks like tariffs, weaker categories and higher costs, and the current data provides some support for that view because:
  • The large non recurring US$882.0 million loss and the drop in margin from 3% to 1.5% both align with their concern that profitability is under pressure from factors outside normal day to day operations.
  • The risk summary also notes that the dividend yield of 5.76% is not well covered by earnings over the same period, which fits the bearish view that cash returns to shareholders may be harder to sustain if margins stay around recent levels.

Skeptical investors are using these margin and dividend coverage numbers as key reasons for caution, as set out in 🐻 Best Buy Bear Case.

Price and valuation sit between weak trailing EPS and higher DCF value

• At a share price of US$65.95, the stock is shown on a P/E of 21.4x, below the peer group average of 30.1x but slightly above the US Specialty Retail industry at 20.1x, and below the stated DCF fair value of about US$155.74. Analysts’ forecasts in the data point to earnings growth of about 9% per year and revenue growth around 2.6% per year.
• The consensus narrative points to gradual revenue and margin changes over time, and the current mix of valuation and growth figures sits between that balanced view and the more extreme bull and bear cases because:
  • The P/E being below peers but above the broader industry, combined with a DCF fair value more than double the current price, allows both sides to argue whether the stock leans closer to a value opportunity or simply reflects its 1.5% trailing margin.
  • Forecast revenue growth of roughly 2.6% a year and earnings growth of about 9% a year in the data are more moderate than the most optimistic upgrades but stronger than the bearish assumption of shrinking sales, so they anchor expectations somewhere in the middle of the narrative range.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Best Buy on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Mixed messages in the data so far? If you are weighing both the concerns and the potential, it may be worth acting promptly and reviewing the numbers yourself, starting with 2 key rewards and 3 important warning signs.

See What Else Is Out There

Best Buy’s thin 1.5% trailing net margin, one off US$882.0 million loss and dividend coverage concerns all point to earnings quality and risk being front of mind.

If those margin pressures and payout worries make you cautious, now is a good time to compare options using our 75 resilient stocks with low risk scores that emphasises companies with more resilient overall risk profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.