Company: BBY
Filing Date: 2025-09-05
Form Type: 10-Q
Source: 0000764478-25-000040
Chunk: 98

Company: BEST BUY CO INC
Filing Date: 2025-09-05
Form: 10-Q
Item: Part II, Item 2
Chunk 98
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 services.

Domestic segment gross profit rate decreased in the second quarter of fiscal 2026, primarily due to lower product margin rates, which were partially offset by rate improvement within the services category. The lower product margin rates were primarily driven by a higher sales mix of lower-margin categories.

Domestic segment gross profit rate remained effectively unchanged in the first six months of fiscal 2026 compared to the first six months of fiscal 2025, primarily driven by lower product margin rates and rate pressure within our Best Buy Health business, mostly offset by rate improvement within the services category, including membership offerings.

Domestic segment adjusted SG&A increased in the second quarter of fiscal 2026, primarily due to higher compensation expense, which included higher medical claims, the lapping of a favorable legal settlement of approximately $10 million in the second quarter of fiscal 2025 and higher technology expense. These increases were partially offset by lower Best Buy Health expenses.

Domestic segment adjusted SG&A increased in the first six months of fiscal 2026, primarily due to higher compensation expense, the lapping of a favorable legal settlement of approximately $10 million in the second quarter of fiscal 2025 and higher technology expense. These increases were partially offset by a favorable indirect tax settlement in the first quarter of fiscal 2026 and lower Best Buy Health expenses.

Domestic segment adjusted operating income rate decreased in the second quarter of fiscal 2026, primarily due to an unfavorable gross profit rate.

Domestic segment adjusted operating income rate decreased in the first six months of fiscal 2026, primarily due to an unfavorable adjusted SG&A rate and an unfavorable gross profit rate.

International Segment

Selected financial data for the International segment was as follows ($ in millions):

Three Months EndedSix Months EndedAugust 2, 2025August 3, 2024August 2, 2025August 3, 2024Revenue$740 $665 $1,380 $1,309 Revenue % change11.3 %(4.0)%5.4 %(3.7)%Comparable sales % change7.6 %(1.8)%3.5 %(2.6)%Gross profit$161 $159 $302 $306 Gross profit as a % of revenue21.8 %23.9 %21.9 %23.4 %Adjusted SG&A(1)$143 $142 $280 $281 Adjusted SG&A as a % of revenue(