Retail · Deep dive

Best Buy

The last big-box electronics chain standing — $41.7B of revenue that has gone sideways for three straight years while Amazon took the category crown, now betting a relaunched third-party marketplace, a retail-media network, and an AI-PC upgrade cycle can outrun tariffs, a $475M health-care write-off, and its fourth CEO handoff.

at risk

Best Buy sells commodity hardware that Amazon undercuts, Walmart cross-subsidizes, and Costco bundles, and after three years of flat ~$41.5B revenue, an electronics-share crown ceded to Amazon, a $475M health write-off, and growth bets (marketplace, retail media) that copy its rivals a decade late, the franchise is managing decline profitably rather than compounding.

My take ★★ Very interesting ★ Interesting − Maybe ✗ Not interesting

Snapshot

Best Buy is the last national big-box consumer-electronics chain in America — roughly 1,083 stores worldwide as of November 1, 2025, and $41.7B of fiscal 2026 revenue (year ended January 31, 2026) — and the purest public-market bet on whether physical electronics retail still deserves to exist. Its 1990s rivals (Circuit City, CompUSA, RadioShack) are dead; its rivals today (Amazon, Walmart, Costco) sell the same boxes as a sideline. It matters now for three reasons: it just ceded US electronics-share leadership to Amazon; it is mid-pivot toward asset-light revenue — a marketplace relaunched in August 2025 and a fast-growing retail-media arm — while absorbing tariffs on a supply chain that was 55% Chinese-sourced as recently as March 2025; and on October 31, 2026 it hands Corie Barry’s seven-year cost-cutting regime to merchandising veteran Jason Bonfig.

Founding story

Richard Schulze, a St. Paul consumer-electronics rep’s son who never attended college, opened the Sound of Music hi-fi store on August 22, 1966 with about $10,500, initially alongside partner James Wheeler, whom he soon bought out. The company went public in 1969 as a modest Twin Cities audio chain. The pivot came from weather: in June 1981 a tornado tore the roof off his highest-volume Roseville store, and Schulze threw a parking-lot “Tornado Sale” advertising “best buys” on damaged and excess stock — drawing bigger crowds than the store had ever seen. The lesson stuck: volume, price, and selection beat commissioned audiophile salesmanship. In 1983 he renamed the company Best Buy and went superstore; in 1989 the “Concept II” format removed commissioned salespeople entirely, a heresy vendors first boycotted and then copied. Schulze handed off the CEO role in 2002 and left the chairmanship in 2012 after failing to tell the board about CEO Brian Dunn’s relationship with a subordinate; his ~$8.8B take-private attempt collapsed, and the board instead hired Hubert Joly, whose Renew Blue plan — Amazon price-matching to kill showrooming, $1B+ of cost cuts, vendor-funded store-in-stores — became one of modern retail’s canonical turnarounds. Barry, Joly’s transformation chief, inherited the company in June 2019.

How it works

Mechanically, Best Buy is a showroom that vendors pay to occupy. The floor of a typical big-box is carved into branded shops — Apple, Samsung, Microsoft, Sony, LG, at points Tesla and Amazon — where the manufacturer funds fixtures, displays, and in some cases dedicated labor; supply-chain reporting in 2022 noted roughly $20M of vendor funding offsetting SG&A in a single quarter, and the experiential-remodel program (about 300 locations targeted through 2025) deepens the model. It is Joly’s structural answer to showrooming: if customers treat the store as a demo room, charge the brands for the demo room.

Around the showroom wraps a fulfillment and services layer: stores double as forward warehouses for online orders — Best Buy’s genuine speed edge over Amazon in big-ticket categories — and Geek Squad (founded 1994, acquired 2002) handles delivery, installation, repair, and support, the labor moat Amazon has never replicated, though Best Buy keeps thinning it in layoffs. Since August 19, 2025, a Mirakl-powered third-party marketplace rides on top of bestbuy.com: hand-vetted sellers (about 500 at launch, 1,100+ by January 31, 2026) list adjacent assortment, Best Buy takes a category-based commission it has not publicly rate-carded, and Best Buy Ads sells the resulting traffic back to brands. The company is the importer of record for only 2-3% of sales (management, May 2026) — vendors carry most direct tariff exposure — though tariff costs flow through wholesale prices regardless.

Product and business overview

The business has five named components. Retail — about 1,083 stores including Canada as of November 1, 2025 — sells computing, TVs, appliances, mobile, and gaming; computing, gaming, mobile, and services led fiscal 2026 comparable-sales growth. Geek Squad and services monetize installation, repair, and support, increasingly bundled into memberships. Best Buy Marketplace is the August 2025 relaunch of an idea tried and shut down in 2016; it generated roughly $300M of gross merchandise value in fiscal Q4 2026 alone (Digital Commerce 360, March 2026). Best Buy Ads, the retail-media network, nearly doubled its advertiser count in fiscal 2026. Best Buy Health is the component in retreat: after buying GreatCall ($800M, 2018), Critical Signal Technologies (2019), and Current Health ($400M, 2021), the company took a $475M goodwill impairment in fiscal 2025, booked $109M of restructuring in Q1 fiscal 2026, sold Current Health back to founder Christopher McGhee in June 2025, and laid off 161 health employees effective September 2025.

Business model and pricing

Revenue is overwhelmingly first-party retail sell-through — hardware bought wholesale and resold at thin margins (fiscal 2026 operating income ran near a 4% enterprise rate). The margin kicker is attach: services, warranties, memberships, financing, and now commissions and ads. The membership ladder, rebuilt in June 2023 from the failed $199.99 Totaltech program, has three rungs: My Best Buy (free; free standard shipping), My Best Buy Plus ($49.99/year; exclusive prices, 60-day returns, free 2-day shipping — with an annual-plan price cut announced May 2026), and My Best Buy Total ($179.99/year; everything in Plus, 24/7 Geek Squad support, protection plans including AppleCare+ on most purchases, 20% off repairs). Marketplace commissions vary by category and are undisclosed; the strategic point, per management in March 2026, is that fiscal 2027 is the last heavy investment year, with material operating-income contribution from marketplace and ads expected in fiscal 2028-2029. Tariff mitigation follows the standard stack — vendor negotiation, re-sourcing (China fell from ~55% of product sourcing in March 2025 to 30-35% by late May 2025, with Vietnam, India, South Korea and Taiwan absorbing volume), pull-forward inventory buys, and, last, price increases, hitting shelves by mid-May 2025 after Barry called them “highly likely.”

Traction over time

Sources: company earnings releases and MacroTrends, 2021-2026. The shape is unmistakable: a $10B pandemic windfall fully surrendered, then three years pinned at ~$41.5B. Fiscal 2026’s +0.5% comp — the first annual gain since fiscal 2022 — leaned on gaming, computing, and mobile, and Q4 holiday comps still fell 0.8% (reported March 3, 2026). Profitability tells a better story: Q4 operating margin recovered to 5.2% from 1.6% a year earlier (which absorbed the health impairment), and FY2027 guidance of $41.2-42.1B revenue with $6.30-6.60 adjusted EPS was reiterated in May 2026. Headcount, ~125,000 in early 2020, is roughly 85,000 now; the ~$18.3B market cap (July 22, 2026) sits far below the 2021 peak.

Market analysis

The US consumer-electronics market was worth roughly $250B in 2025 (Grand View Research), with forecasters projecting ~4.7-4.8% annual growth into the 2030s — growth that accrues to channels, not category specialists. Three structural forces define Best Buy’s decade. First, replacement-cycle dependence: the industry is betting the Windows 10 end-of-life (October 2025) plus Copilot+ AI PCs — forecast to scale from ~5.2M units in 2025 toward ~47.7M by 2028 — restarts the computing cycle; fiscal 2026’s computing-led comps suggest it has begun. Second, channel shift: Amazon’s ~30% share of tracked electronics spending now exceeds Best Buy’s ~28%, and every point that moves online erodes big-box fixed-cost leverage. Third, policy: 2025’s tariffs raised input costs across a category with near-total Asian manufacturing dependence, and DRAM inflation heading into late 2026 threatens the affordability of the very AI PCs the bull case needs.

Competitive intel

Amazon (~30% of tracked US electronics spend, 2024-2025) beat Best Buy on price and assortment and now beats it on share; Best Buy’s remaining edges are immediacy, Geek Squad installation, and vendor experiences Amazon cannot stage. Walmart ($713B revenue, fiscal 2026; ~12.8% electronics share) sells electronics as traffic bait atop a grocery machine and ran the marketplace-plus-retail-media playbook years earlier. Costco turns TVs and laptops into near-zero-margin membership perks with return policies that embarrass paid protection plans — it cherry-picks Best Buy’s best transactions. Target nibbles at accessories, gaming, and seasonal tech across 1,900+ stores. Micro Center (~28 stores, private) owns the enthusiast — components, DIY builds, expert staff — capturing the highest-spend computing customers exactly where the AI-PC cycle concentrates. And the vendors themselves — Apple, Samsung, Dell — sell direct around Best Buy even while renting its floors; it needs Apple far more than Apple needs it.

History and evolution

• August 22, 1966 — Schulze opens Sound of Music, St. Paul; public in 1969.
• June 1981 — Tornado wrecks the Roseville store; the “Tornado Sale” reveals the discount-volume formula.
• 1983 — Rebrand to Best Buy; first superstore. NYSE listing 1987.
• 1989 — Concept II eliminates commissioned salespeople; vendors briefly revolt.
• 2002 — Geek Squad acquired; Schulze hands the CEO role to Brad Anderson.
• 2009 — Circuit City liquidates; Best Buy is the last national chain standing.
• 2012 — Annus horribilis: CEO Brian Dunn resigns in scandal, Schulze exits as chairman, his ~$8.8B buyout bid fails, stock under $15. Joly hired September 2012; Renew Blue launches November 2012 with permanent Amazon price-matching.
• 2013-2018 — Turnaround: Samsung Experience Shops (April 2013), Apple and Microsoft shops, $1B+ cost cuts. GreatCall bought for ~$800M (2018) — the health bet begins.
• June 2019 — Barry becomes CEO. COVID furloughs of 51,000 (April 2020) precede a $51.8B blowout fiscal 2022.
• 2021-2023 — Totaltech launches at $199.99, flops, is rebuilt as My Best Buy Plus/Total (June 2023). Post-pandemic comps collapse; rolling layoffs hit stores and Geek Squad (“going sleeper,” per laid-off workers on Reddit, 2024).
• March 4, 2025 — Fiscal 2025 results absorb the $475M health impairment; Barry warns tariff price hikes “highly likely”; shares plunge.
• May 29, 2025 — Q1 FY2026 comps -0.7%; guidance cut to $41.1-41.9B on tariffs; China sourcing already down to 30-35%.
• June-September 2025 — Current Health sold back to its founder; 161 health layoffs; the retreat is effectively complete.
• August 19, 2025 — Marketplace relaunches with ~500 vetted sellers.
• March 3, 2026 — FY2026: $41.7B revenue, +0.5% comps, marketplace at ~$300M Q4 GMV and 1,100+ sellers.
• April 22, 2026 — Barry’s exit announced; Jason Bonfig named sixth CEO, effective October 31, 2026.
• May 28, 2026 — Q1 FY2027: comps +2.0%, guidance reiterated, May comps up high single digits.

What people say

The case for. Bulls note the stock screens cheap — below peer earnings multiples in mid-2026 (Yahoo Finance analysis), consensus target near $86 against an ~$18.3B market cap — for a company that stayed profitable through a $10B revenue drawdown and returned $1.07B to shareholders in fiscal 2026. Sell-side coverage in March-May 2026 credited execution: Q2 FY2026’s +1.6% comp was the best in three years, fiscal 2026 comps turned positive, the marketplace onboarded sellers faster than planned, and Best Buy Ads nearly doubled its advertiser base. Geek Squad and vendor store-in-stores are things Amazon structurally cannot copy, and the AI-PC/Windows-10-sunset cycle plays to Best Buy’s premium-computing strength. Customer praise clusters on knowledgeable in-store help and fast pickup.

The complaints. The service moat is fraying in public. Geek Squad’s Trustpilot pages run heavily negative — recurring themes are unreachable live agents, outsourced phone support, no-show appointments (one reviewer describes a four-hour window nobody honored), unresolved repairs, and difficulty canceling recurring membership charges. Employees tell the same story from inside: Retail Dive reporting and Reddit threads document years of hours cuts (income reductions up to 40% at 150 restructured stores starting January 2021), 2024 Geek Squad layoffs, and thinner floor staffing that veterans say guts the expertise the model depends on — 30,000+ jobs cut under Barry, per Fortune (April 2026). The bear case ties it together: flat revenue since fiscal 2024, negative Q4 FY2026 holiday comps, category leadership lost to Amazon (CIRP data, 2025), tariffs taxing cost of goods while DRAM inflation threatens AI-PC affordability, and a health diversification that ended in a $475M write-off — evidence, Fortune argued in April 2026, that a well-managed comeback “fizzled” into stasis.

Outlook: well positioned or at risk?

At-risk. The uncomfortable core of Best Buy is that it is a superb operator of a structurally disadvantaged position. Everything it sells is a commodity someone else sells cheaper: Amazon with a lower cost structure and 30% of the category, Walmart with grocery-subsidized pricing, Costco treating TVs as membership loss leaders. Its differentiators — Geek Squad labor, vendor showrooms, immediacy — are real but eroding from both ends: the company keeps cutting the labor that constitutes the moat, and the Trustpilot record suggests customers have noticed. Three straight years at ~$41.5B of revenue is not a plateau; in a category growing ~4.7% a year, it is share loss with good expense control. The growth initiatives are rational but derivative — Walmart and Amazon ran the marketplace and retail-media playbooks roughly a decade earlier, and Best Buy’s own first marketplace died in 2016. The escape hatch, Best Buy Health, consumed ~$1.2B of acquisitions and ended in impairment, divestiture, and layoffs inside seven years.

The well-positioned case deserves its hearing. The balance sheet is clean, profitability held through the drawdown, fiscal 2026 comps inflected positive, Q1 FY2027 comps of +2.0% beat guidance with May running up high single digits, and the AI-PC replacement cycle is a genuine, dated tailwind (Windows 10 support ended October 2025) in Best Buy’s strongest category. If marketplace and ads deliver the promised operating-income contribution in fiscal 2028-2029, margins improve without an incremental store visit — and Bonfig, who built both businesses, is the right insider for the plan. But the plan’s ceiling is the problem: it monetizes existing traffic better; it does not create a reason for traffic to grow. Every prior cycle — flat panels, smartphones, the pandemic — lifted revenue and then receded to a lower structural share, as Amazon’s logistics and vendors’ direct channels took a bigger cut of each wave. An AI-PC bump in fiscal 2027-2028 is likely; a durable reversal of a fifteen-year share bleed is not. A company whose best case is harvesting a defensible niche more profitably while its largest competitor compounds share is at risk. The verdict is about trajectory, not solvency: Best Buy will be here in 2030; the question is how much smaller its claim on the category will be.

How a challenger would attack it

Rebuild the service moat Best Buy is dismantling, in small boxes. Best Buy’s only non-commodity assets are expert labor and physical immediacy — and it has cut 30,000+ jobs, slashed store hours up to 40% at restructured locations, and let Geek Squad’s Trustpilot record fill with no-show appointments and unreachable agents. Micro Center already proves the counter-model at ~28 stores: deep inventory in high-attachment computing, genuinely knowledgeable staff, cult loyalty among the highest-spend customers. A challenger scales that formula — 15,000-square-foot enthusiast-grade stores in the top 50 metros, staffed by the experienced techs Best Buy laid off, timed to the AI-PC/Windows-10 replacement cycle that concentrates spend in exactly the advice-heavy category where a hollowed-out floor loses. The second vector is services unbundled from retail: a standalone, tech-enabled install-and-repair network (transparent scheduling, live technician tracking, no $179.99 membership gate) attacks the Total membership’s weakest point — customers who report difficulty even canceling recurring charges. Third, exploit the vendor tension: Apple, Samsung and Dell rent Best Buy’s floors while selling around it; a challenger offering brands better-instrumented showroom economics — retail-media-grade attribution on physical demos — competes for the same vendor funding that offsets Best Buy’s SG&A, roughly $20M in a single quarter. Best Buy can’t respond by re-adding labor without breaking the margin story its ~$18.3B valuation rests on.

Same playbook, new buyer

Vendor-funded showrooms and attach economics work wherever hardware is confusing and installation is the product. The Joly model — charge brands for the demo floor, monetize the customer with services and memberships — transfers to home energy (heat pumps, EV chargers, solar-plus-battery: high-ticket, advice-dependent, installer-constrained, no national retail face), smart-home and security retrofits, and health/mobility tech for aging-in-place — the market Best Buy correctly identified with GreatCall and then abandoned after a $475M write-off, leaving validated demand with no scaled retail channel. Each buyer needs exactly what big-box electronics no longer does: see the product, trust the advice, book the install. A B2B shift is equally open: Geek Squad-style deployment and support for small businesses (POS, networking, fleets of laptops) sold as managed service, a segment Best Buy’s consumer-store cost structure and shrinking labor base can’t serve. Best Buy won’t follow into any of these — its next three years are contractually narrated to Wall Street as marketplace-and-ads margin harvest, its health retreat burned the board’s appetite for adjacency, and every incremental dollar of labor investment contradicts the cost-cut regime both the outgoing and incoming CEO built their careers on.

Sources and further reading

• Best Buy Reports Q4 FY26 Results — Best Buy Corporate, March 3, 2026. FY2026 revenue $41.69B, comps +0.5%, Q4 comps -0.8%, $1.07B returned to shareholders.
• Best Buy’s holiday sales disappoint, but retailer shows progress in growing profits — CNBC, March 3, 2026. Q4 FY2026 results and margin recovery.
• Best Buy reiterates FY27 guidance after Q1 revenue and earnings rise — Retail Insight Network, May 2026. Q1 FY2027 comps +2.0%, guidance, tariff/importer-of-record detail.
• Best Buy launches third-party marketplace as it looks for sales drivers — CNBC, August 19, 2025. Marketplace relaunch with ~500 vetted sellers.
• Best Buy online marketplace gains traction as new profit driver — Digital Commerce 360, March 6, 2026. ~$300M Q4 GMV, 1,100+ sellers, FY2028-29 profit contribution timeline.
• Best Buy shares plunge as CEO warns price increases are ‘highly likely’ due to Trump tariffs — CNBC, March 4, 2025. 55% China / 20% Mexico sourcing; FY2025 results.
• Tariffs Hit Best Buy Revenues As Retailer Reduces Chinese Imports — Forbes, May 29, 2025. China sourcing cut to 30-35%; guidance reduction.
• Best Buy Health Lays Off 161 Employees After Current Health Divestiture — Home Health Care News, July 2025. Health retreat, $109M Q1 FY2026 restructuring, $475M FY2025 impairment context.
• Best Buy CEO Corie Barry is stepping down: How she went from architect of a comeback to cautionary tale — Fortune, April 22, 2026. Barry tenure assessment, 30,000+ job cuts, Bonfig succession.
• Best Buy Announces Chief Executive Officer Succession Plans — Best Buy Corporate, April 22, 2026. Bonfig effective October 31, 2026.
• Best Buy’s Richard Schulze: Stereo seller to retail giant — MPR News, May 2012. Sound of Music origin, tornado sale, 1983 rebrand.
• Behind The Scenes Of Best Buy’s Record-Setting Turnaround With Hubert Joly — Forbes, April 2021. Renew Blue, showrooming, price matching.
• Geek Squad Reviews — Trustpilot, 2024-2026. Recurring service-quality and support-access complaints.