The company's strategy for fiscal 2026 involves three key priorities: omni-channel enhancements, investment in new growth initiatives, and operational efficiency. This includes improving digital experiences, leveraging AI, and launching a new Best Buy Marketplace.

The company is targeting a mid-fiscal 2026 launch for its new Best Buy Marketplace within the Domestic segment. This initiative is expected to complement the existing product assortment and unlock potential new commission and advertising revenue.

The company expects to reduce its Domestic segment Best Buy store count by approximately 5 to 10 stores in fiscal 2026. This indicates a continued effort to optimize the store footprint.

The company is committed to operational efficiency by identifying cost reductions and savings to fund new initiatives and offset financial pressures. This indicates a focus on managing expenses and improving profitability.

The company evolved its leadership development offerings to grow and transform Best Buy for its future. These offerings included unique programs such as an enterprise-wide manager development program, a skill development program for senior store leaders and several emerging talent programs including an officer readiness program.

The company recorded a $475 million goodwill impairment charge related to its Best Buy Health reporting unit. This indicates that the company is facing challenges in scaling the Best Buy Health business as originally forecasted.

The 10-K filing highlights that consumer demand is sensitive to macroeconomic conditions, including GDP growth, inflation, recession, consumer confidence, employment levels, and interest rates. Any decrease in consumer demand due to these conditions may negatively impact financial results.

The company acknowledges that geopolitical tensions, including trade policies, political instability, and tariffs, could have a material adverse impact on the business. The company's reliance on vendor imports from China and Mexico is specifically mentioned.

The document emphasizes the heightened risk of cybersecurity attacks and data security incidents, which could have a material adverse impact on the business. The integration of AI into operations increases cybersecurity and privacy risks.

The company acknowledges strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers. Competition is becoming increasingly diverse, including in the advertising revenue space and with the proliferation of marketplace platforms offering products at increasingly lower prices.

The company recognizes that recognition and the reputation of its company and brands are key to its success. Operational and external factors could damage the company's reputation. Third parties may commit fraud (including AI-driven fraud) while using our brand without our permission, possibly harming brand perception or reputation.

The company is reliant on its key vendors, including Apple, Samsung, HP, Sony and LG. These vendors may be able to leverage their competitive advantages to the company's detriment. In addition, vendors may decide to limit or cease allowing the company to offer certain categories, focus their marketing efforts on alternative channels or make unfavorable changes to the company's financial or other terms.

The company depends on its vendors' abilities to deliver products at the right location, at the right time and in the right quantities. The company also depends on third parties for the operation of certain aspects of its supply chain network. These risks are compounded for small parcel home deliveries, as the company is dependent on a relatively small number of carriers with the scope and capacity required by its business.

The company's ability to adjust store operating models to adapt to changing patterns is a factor that could impact its long-term real estate strategy. Other factors include the location and appropriate number of stores, supply chain and other facilities in the portfolio; the products and services offered at each store; the local competitive positioning, trade area demographics and economic factors for each of the stores; and the primary term lease commitment and long-term lease option coverage for each store.

Domestic segment adjusted SG&A decreased in fiscal 2025, primarily due to lower employee compensation expense, which was primarily store payroll, the impact of the 53rd week in fiscal 2024 and reduced vehicle rental costs. These decreases were partially offset by higher advertising and technology expense.

The effective and efficient operation of the company's business is dependent on its information technology systems and those of its information technology vendors. The company relies heavily on these information technology systems to manage all key aspects of its business, including demand forecasting, purchasing, supply chain management, point-of-sale processing, services fulfillment, staff planning and deployment, financial management, reporting and forecasting and safeguarding critical and sensitive information.

The company operates in a highly and increasingly dynamic industry sector fueled by constant technological innovation and disruption, including most recently by the proliferation of artificial intelligence (“AI”) technologies. If the company fails to interpret, predict and react to these changes in a timely and effective manner, the consequences may include failure to offer, or inability to secure an adequate supply of, the products and services that customers want; excess inventory, which may require heavy discounting or liquidation; delays in adapting merchandising, marketing or supply chain capabilities to accommodate changes in product trends; and damage to the brand and reputation.

Starting with our digital experiences, we intend to improve our search and discover capability to make it easier for our customers to find what they want and need. We will leverage artificial intelligence (“AI”) to launch an innovative new search experience across our websites and apps. We will also leverage Al to enhance personalization, which we believe will drive both customer engagement and sales conversion.

The company currently expects capital expenditures in fiscal 2026 of $700 million to $750 million, which is a decrease from the $706 million spent in fiscal 2025. This suggests a more conservative approach to capital investments.

The company repurchased $500 million of common stock in fiscal 2025 and paid $807 million in cash dividends. The company intends to return excess cash over time to shareholders through dividends and share repurchases while maintaining investment-grade credit metrics.

On March 4, 2025, the Board announced its approval of a 1% increase in the regularly quarterly cash dividend to $0.95 per share. This demonstrates a commitment to returning value to shareholders.

As the company pursues its purpose to enrich lives through technology, it is committed to creating shared long-term value and positively impacting the world, the environment and the communities in which it operates through interactions with its stakeholders, including customers, employees, vendor partners, community partners and shareholders.

The company aspires to drive forward the circular economy, a system that aims to reduce waste and preserve resources. It focuses on its highest-impact areas, including operations, the energy it procures and the products it sells. These efforts contribute to mitigating climate risks, reducing potential risks to its business and generating long-term cost savings.

The company is committed to respecting human rights through its alignment with the United Nations Guiding Principles on Business and Human Rights. Further, across all the products and services we procure, we seek to mitigate risk and enhance our partnership with suppliers and create value for all stakeholders through our Responsible Sourcing Program.

The company continued to operate in a challenged consumer electronics industry and experienced softer consumer demand. While its comparable sales declined in fiscal 2025 in categories such as appliances, home theater and gaming, it grew comparable sales in its computing, tablet and services categories.

The company enters fiscal 2026 facing significant uncertainty regarding the scope, timing and magnitude of tariffs it may experience for the products it sells and the consequent financial impact on its business.

Regulatory activity affecting the retail sector has increased in recent years, raising the risk of fines and additional operating costs associated with compliance. Additionally, defending against lawsuits and other proceedings may involve significant expense and divert management's attention and resources from other matters.