Company: BBY
Filing Date: 2025-12-05
Form Type: 10-Q
Source: 0000764478-25-000057
Chunk: 31

Company: BEST BUY CO INC
Filing Date: 2025-12-05
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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aditional Domestic store locations in conjunction with our restructuring initiative that commenced in the second quarter of fiscal 2026, with additional closures expected in fiscal 2027. See Note 2, Restructuring, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for additional information.

Income Tax Expense

Income tax expense decreased to $64 million in the third quarter of fiscal 2026 compared to $85 million in the third quarter of fiscal 2025, primarily due to lower pre-tax income, partially offset by the impact of certain expenses that are not tax deductible. Effective tax rate (“ETR”) increased to 31.5% in the third quarter of fiscal 2026 compared to 23.9% in the third quarter of fiscal 2025, primarily due to the impact of certain expenses that are not tax deductible and lower pre-tax income, partially offset by increased tax benefits from resolutions of tax matters.

Income tax expense decreased to $151 million in the first nine months of fiscal 2026 compared to $266 million in the first nine months of fiscal 2025, primarily due to lower pre-tax income and the discrete tax impacts of the restructuring charges and associated exit of a component of our Best Buy Health business, partially offset by the impact of certain expenses that are not tax deductible. ETR decreased to 22.3% in the first nine months of fiscal 2026 compared to 24.8% in the first nine months of fiscal 2025, primarily due to the discrete tax impacts of the restructuring charges and associated exit of a component of our Best Buy Health business, partially offset by the impact of certain expenses that are not tax deductible and lower pre-tax income. See Note 2, Restructuring, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for additional information.

Our tax provision for interim periods is determined using an estimate of our annual ETR, adjusted for discrete and unusual and infrequent items, if any, that are taken into account in the relevant period. We update our estimate of the annual ETR each quarter, and we make a cumulative adjustment if our estimated tax rate changes. Our quarterly tax provision and our quarterly estimate of our annual ETR are subject to variation due to several factors, including our ability to accurately forecast our pre-tax and taxable income and loss by jurisdiction, tax audit developments, recognition of excess tax benefits or deficiencies related to stock-based compensation, foreign currency gains (