BEST BUY CO INC has recently released its 10-Q report, revealing a revenue of $9.4 billion in the second quarter and $18.2 billion in the first six months of fiscal 2026. The company's comparable sales grew by 1.6% and 0.4% in the same periods, driven by new technology innovation, focus on omni-channel customer experience, and strong vendor partnerships. The company's restructuring charges in the second quarter of fiscal 2026 were primarily associated with a labor and store optimization restructuring initiative, leading to a decrease in operating income and diluted EPS.
The company operates in two reportable segments: Domestic and International. The Domestic segment comprises operations in the U.S., while the International segment includes operations in Canada. The company's fiscal year ends on the Saturday nearest the end of January, and a large proportion of its revenue and earnings are generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season.
In the second quarter of fiscal 2026, the company's revenue and gross profit rate changes were driven by both its Domestic and International segments. However, changes in its SG&A rate and operating income rate were primarily driven by its International and Domestic segments, respectively. The company also plans to reduce its traditional Domestic Best Buy store count by approximately 5 to 10 stores in the normal course of operations in fiscal 2026.
Income tax expense decreased in the second quarter and first six months of fiscal 2026, primarily due to lower pre-tax income. The effective tax rate increased to 26.8% in the second quarter of fiscal 2026 compared to 25.8% in the second quarter of fiscal 2025, primarily due to decreased tax benefits from resolutions of tax matters and stock-based compensation, as well as increased U.S. taxes from sourcing operations, partially offset by discrete tax impacts of the restructuring charges and associated exit of a component of the Best Buy Health business.
The company's MD&A also includes non-GAAP financial measures, such as consolidated adjusted operating income, consolidated adjusted operating income rate, consolidated adjusted effective tax rate, and consolidated adjusted diluted EPS. It believes that these measures, when reviewed in conjunction with GAAP financial measures, provide additional useful information for evaluating current period performance and assessing future performance. Following these announcements, the company's shares moved -1.14%, and are now trading at a price of $76.17. For more information, read the company's full 10-Q submission here.
