Financial Data and Key Metrics Changes - The company reported revenue of $9.4 billion for Q2, with an adjusted operating income rate of 3.9% and adjusted earnings per share of $1.28, marking a 1.6% increase in revenue year-over-year [6][7][36] - Comparable sales growth of 1.6% was the highest in three years, driven by new technology innovations and a strong omnichannel customer experience [7][36] - The gross profit rate declined by 30 basis points to 23.4% due to a higher mix of sales from lower-margin categories [35][38] Business Line Data and Key Metrics Changes - Sales growth was observed in gaming, computing, mobile phones, wearables, and headphones, while declines were noted in home theater, appliances, tablets, and drones [7][8][36] - The gaming category saw significant growth, particularly due to the successful launch of the Switch 2, with strong results in console sales and related peripherals [8][9] - Computing experienced its sixth consecutive quarter of sales growth, achieving the highest second-quarter laptop unit sales in 15 years [9] Market Data and Key Metrics Changes - Domestic revenue increased by 0.9% to $8.7 billion, with comparable sales growth of 1.1% [36][37] - International revenue rose by 11.3% to $740 million, driven by comparable sales growth of 7.6% and revenue from new Best Buy Express locations in Canada [37] - Online sales accounted for 33% of domestic sales in Q2, continuing to grow year-over-year for the third consecutive quarter [10] Company Strategy and Development Direction - The company aims to strengthen its position as a leading omnichannel destination for technology while building new profit streams [13][22] - Strategic priorities include enhancing omnichannel experiences, launching a marketplace to increase product availability, and driving efficiencies in operations [22][28][29] - Partnerships with vendors are emphasized, with a focus on innovative product launches and improved customer experiences [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's plans for the second half of the year, despite uncertainties related to tariffs [12][40] - The company is maintaining its annual guidance, expecting revenue between $41.1 billion and $41.9 billion, with comparable sales projected to be flat to slightly up [41][42] - Management noted that customer behavior remains resilient, with a focus on high-ticket purchases when necessary [11][63] Other Important Information - The company reported the lowest employee turnover rates in ten years and higher engagement scores from employee surveys [11] - Vendor labor investment is expected to increase by approximately 20% in the second half of the year, reflecting strong partnerships [19][58] - The company is implementing a new data-driven sourcing solution to enhance supply chain efficiency [30] Q&A Session Summary Question: Market share performance in Q2 - Management feels better about market share position, indicating flattish share overall despite variability [48] Question: Transition to Q3 comparable sales - Q3 comparable sales are expected to be similar to Q2, with growth from gaming and mobile computing [52] Question: Vendor support and sales lift - Vendor support is increasing, with investments in labor and physical spaces, but no specific sales lift is baked into projections [57] Question: Consumer reaction to tariff price increases - Management noted that tariff impacts were in line with expectations, with mitigation strategies in place [63] Question: Profit pool challenges and strategies - The company is focusing on growing its ad business and launching a marketplace to capture market share and drive profitability [87][89] Question: Challenges in home theater and appliances - Management is adjusting pricing and assortment strategies to stabilize performance in these categories [92][95]

Best Buy (BBY) Q2 2026 Earnings Call August 28, 2025 08:00 AM ET Speaker0Ladies and gentlemen, thank you for standing by. Welcome to Best Buy's Second Quarter Fiscal twenty twenty six Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. As a reminder, this call is being recorded for playback and will be available by approximately one p.M. Eastern Time today. I will now turn the conference call over to Molly O'Brien, Head of ...