BEST BUY CO INC 10-Q

Item 1. Financial Statements Condensed Consolidated Balance Sheets $ in millions, except per share amounts (unaudited) August 1, 2026 January 31, 2026 August 2, 2025 Assets Current assets Cash and cash equivalents $ 2,255 $ 1,738 $ 1,456 Receivables, net 922 1,043 917 Merchandise inventories 6,296 5,230 5,816 Other current assets 508 493 688 Total current assets 9,981 8,504 8,877 Property and equipment, net 1,990 1,986 2,046 Operating lease assets 2,882 2,869 2,816 Goodwill 790 790 908 Other assets 464 521 606 Total assets $ 16,107 $ 14,670 $ 15,253 Liabilities and equity Current liabilities Accounts payable $ 6,026 $ 4,745 $ 5,682 Unredeemed gift card liabilities 216 235 230 Deferred revenue 912 900 889 Accrued compensation and related expenses 394 423 448 Accrued liabilities 763 742 684 Current portion of operating lease liabilities 614 623 610 Current portion of long-term debt 11 11 10 Total current liabilities 8,936 7,679 8,553 Long-term operating lease liabilities 2,350 2,334 2,292 Long-term debt 1,158 1,165 1,164 Long-term liabilities 480 528 528 Contingencies (Note 10) Equity Best Buy Co., Inc. Shareholders' Equity Preferred stock, $ 1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none - - - Common stock, $ 0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 210.4 million, 209.1 million and 210.4 million shares, respectively 22 22 22 Additional paid-in capital 67 14 - Retained earnings 2,784 2,610 2,381 Accumulated other comprehensive income 310 318 313 Total equity 3,183 2,964 2,716 Total liabilities and equity $ 16,107 $ 14,670 $ 15,253 NOTE: The Consolidated Balance Sheet as of January 31, 2026, has been condensed from the audited consolidated financial statements. See Notes to Condensed Consolidated Financial Statements. 3 Table of Contents Condensed Consolidated Statements of Earnings $ and shares in millions, except per share amounts (unaudited) Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Revenue $ 9,779 $ 9,438 $ 18,715 $ 18,205 Cost of sales 7,441 7,244 14,275 13,962 Gross profit 2,338 2,194 4,440 4,243 Selling, general and administrative expenses 1,923 1,829 3,664 3,550 Restructuring charges ( 6 ) 114 ( 15 ) 223 Operating income 421 251 791 470 Other income (expense): Loss on disposal of subsidiaries - ( 4 ) - ( 4 ) Investment income and other 20 18 39 33 Interest expense ( 11 ) ( 12 ) ( 22 ) ( 24 ) Earnings before income tax expense and equity in income of affiliates 430 253 808 475 Income tax expense 116 68 218 87 Equity in income of affiliates 1 1 1 - Net earnings $ 315 $ 186 $ 591 $ 388 Basic earnings per share $ 1.49 $ 0.88 $ 2.80 $ 1.83 Diluted earnings per share $ 1.48 $ 0.87 $ 2.79 $ 1.82 Weighted-average common shares outstanding: Basic 211.3 211.5 210.8 211.8 Diluted 212.7 212.0 212.1 212.5 See Notes to Condensed Consolidated Financial Statements. 4 Table of Contents Condensed Consolidated Statements of Comprehensive Income $ in millions (unaudited) Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Net earnings $ 315 $ 186 $ 591 $ 388 Foreign currency translation adjustments, net of tax ( 9 ) - ( 8 ) 13 Comprehensive income $ 306 $ 186 $ 583 $ 401 See Notes to Condensed Consolidated Financial Statements. 5 Table of Contents Condensed Consolidated Statements of Cash Flows $ in millions (unaudited) Six Months Ended August 1, 2026 August 2, 2025 Operating activities Net earnings $ 591 $ 388 Adjustments to reconcile net earnings to total cash provided by operating activities: Depreciation and amortization 389 422 Restructuring charges ( 15 ) 223 Stock-based compensation 74 75 Deferred income taxes 15 45 Loss on disposal of subsidiaries - 4 Other, net 1 4 Changes in operating assets and liabilities: Receivables 119 123 Merchandise inventories ( 1,079 ) ( 717 ) Other assets 19 ( 24 ) Accounts payable 1,259 693 Income taxes ( 3 ) ( 167 ) Other liabilities ( 74 ) ( 286 ) Total cash provided by operating activities 1,296 783 Investing activities Additions to property and equipment ( 344 ) ( 341 ) Disposal of subsidiary - ( 27 ) Other, net 5 ( 1 ) Total cash used in investing activities ( 339 ) ( 369 ) Financing activities Repurchase of common stock ( 36 ) ( 165 ) Dividends paid ( 405 ) ( 403 ) Other, net ( 2 ) ( 6 ) Total cash used in financing activities ( 443 ) ( 574 ) Effect of exchange rate changes on cash and cash equivalents ( 3 ) 5 Increase (decrease) in cash, cash equivalents and restricted cash 511 ( 155 ) Cash, cash equivalents and restricted cash at beginning of period 2,023 1,868 Cash, cash equivalents and restricted cash at end of period $ 2,534 $ 1,713 See Notes to Condensed Consolidated Financial Statements. 6 Table of Contents Condensed Consolidated Statements of Changes in Shareholders' Equity $ and shares in millions, except per share amounts (unaudited) Common Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balances at May 2, 2026 210.7 $ 22 $ 65 $ 2,677 $ 319 $ 3,083 Net earnings, three months ended August 1, 2026 - - - 315 - 315 Other comprehensive loss: Foreign currency translation adjustments, net of tax - - - - ( 9 ) ( 9 ) Stock-based compensation - - 34 - - 34 Issuance of common stock 0.1 - - - - - Common stock dividends, $ 0.96 per share - - 5 ( 208 ) - ( 203 ) Repurchase of common stock ( 0.4 ) - ( 37 ) - - ( 37 ) Balances at August 1, 2026 210.4 $ 22 $ 67 $ 2,784 $ 310 $ 3,183 Balances at January 31, 2026 209.1 $ 22 $ 14 $ 2,610 $ 318 $ 2,964 Net earnings, six months ended August 1, 2026 - - - 591 - 591 Other comprehensive loss: Foreign currency translation adjustments, net of tax - - - - ( 8 ) ( 8 ) Stock-based compensation - - 74 - - 74 Issuance of common stock 1.7 - 4 - - 4 Common stock dividends, $ 1.92 per share - - 12 ( 417 ) - ( 405 ) Repurchase of common stock ( 0.4 ) - ( 37 ) - - ( 37 ) Balances at August 1, 2026 210.4 $ 22 $ 67 $ 2,784 $ 310 $ 3,183 Balances at May 3, 2025 211.3 $ 22 $ - $ 2,428 $ 313 $ 2,763 Net earnings, three months ended August 2, 2025 - - - 186 - 186 Stock-based compensation - - 35 - - 35 Common stock dividends, $ 0.95 per share - - 4 ( 205 ) - ( 201 ) Repurchase of common stock ( 0.9 ) - ( 39 ) ( 28 ) - ( 67 ) Balances at August 2, 2025 210.4 $ 22 $ - $ 2,381 $ 313 $ 2,716 Balances at February 1, 2025 211.4 $ 22 $ - $ 2,486 $ 300 $ 2,808 Net earnings, six months ended August 2, 2025 - - - 388 - 388 Other comprehensive income: Foreign currency translation adjustments, net of tax - - - - 13 13 Stock-based compensation - - 75 - - 75 Issuance of common stock 1.5 - 2 - - 2 Common stock dividends, $ 1.90 per share - - 10 ( 413 ) - ( 403 ) Repurchase of common stock ( 2.5 ) - ( 87 ) ( 80 ) - ( 167 ) Balances at August 2, 2025 210.4 $ 22 $ - $ 2,381 $ 313 $ 2,716 See Notes to Condensed Consolidated Financial Statements. 7 Table of Contents Notes to Condensed Consolidated Financial Statements (unaudited) 1. Basis of Presentation Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us,” “our” and the “company” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the U.S. (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. The first six months of fiscal 2027 and fiscal 2026 each included 26 weeks. Unless otherwise noted, references to years in these notes to condensed consolidated financial statements relate to fiscal years, not calendar years. In preparing the accompanying condensed consolidated financial statements, we evaluated the period from August 1, 2026, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. Other than the receipt of additional tariff refunds summarized below, no such events were identified. Tariff Refunds In the second quarter of fiscal 2027, $ 34 million of tariffs imposed under the International Emergency Economic Powers Act were refunded pursuant to the U.S. Supreme Court decision on February 20, 2026, that such tariffs were unauthorized. On September 2, 2026, an additional $ 41 million was refunded, which will be recorded in the financial statements in the third quarter of fiscal 2027. These refunds, in aggregate, represent substantially all of the tariff refunds we have requested. Tariff refunds are recorded as a reduction to Cost of sales on our Condensed Consolidated Statements of Earnings in the fiscal period received. Unadopted Accounting Pronouncements In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosure of specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 Form 10-K. Supply Chain Financing We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution. Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $ 986 million, $ 600 million and $ 872 million as of August 1, 2026, January 31, 2026, and August 2, 2025, respectively. Total Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the totals shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Cash and cash equivalents $ 2,255 $ 1,738 $ 1,456 Restricted cash included in Other current assets 279 285 257 Total cash, cash equivalents and restricted cash $ 2,534 $ 2,023 $ 1,713 Amounts included in restricted cash are primarily restricted to support obligations related to product protection plans provided under our membership offerings, self-insurance liabilities and amounts held on behalf of third-party sellers on Best Buy Marketplace. 8 Table of Contents 2. Restructuring Restructuring charges were as follows ($ in millions): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Fiscal 2026 Labor and Store Optimization Initiative $ ( 3 ) $ 122 $ ( 11 ) $ 122 Best Buy Health Optimization and China Sourcing Initiative ( 1 ) ( 6 ) ( 2 ) 105 Fiscal 2024 Restructuring Initiative ( 2 ) ( 2 ) ( 2 ) ( 4 ) Total $ ( 6 ) $ 114 $ ( 15 ) $ 223 Fiscal 2026 Labor and Store Optimization Initiative In the second quarter of fiscal 2026, we commenced a restructuring initiative intended to align field resources with changing customer behaviors, close select non-traditional store locations and redirect corporate resources for better alignment with our strategy. We currently do not expect to incur material future restructuring charges related to this initiative. All charges incurred related to this initiative were from continuing operations and presented within Restructuring charges on our Condensed Consolidated Statements of Earnings. The composition of restructuring charges incurred related to this initiative were as follows ($ in millions): Three Months Ended Six Months Ended Cumulative Amount as of August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 August 1, 2026 Domestic: Termination benefits $ ( 2 ) $ 78 $ ( 9 ) $ 78 $ 59 Asset impairments and other costs (1) ( 1 ) 41 ( 2 ) 41 44 Total Domestic ( 3 ) 119 ( 11 ) 119 103 International: Termination benefits - 3 - 3 3 Total restructuring charges $ ( 3 ) $ 122 $ ( 11 ) $ 122 $ 106 (1) Amounts primarily represent asset impairments related to planned store closures, an impairment related to an indefinite-lived tradename and other exit costs. The remaining carrying value of net assets approximates fair value and was immaterial as of August 1, 2026. Restructuring accrual activity related to this initiative was as follows ($ in millions): Termination Benefits Domestic International Total Balances at January 31, 2026 $ 42 $ 3 $ 45 Cash payments ( 9 ) ( 1 ) ( 10 ) Adjustments (1) ( 9 ) - ( 9 ) Balances at August 1, 2026 $ 24 $ 2 $ 26 (1) Represents subsequent adjustments to previously planned organizational changes, primarily related to higher-than-expected employee retention. Our restructuring accrual liabilities primarily related to termination benefits of $ 26 million as of August 1, 2026, reflect expected future cash payments primarily during fiscal 2027 and fiscal 2028. Best Buy Health Optimization and China Sourcing Initiative In the first quarter of fiscal 2026, we commenced a restructuring initiative primarily focused on optimizing our Best Buy Health business by taking actions to maximize value and improve profitability in light of its performance against our original forecasting. These actions included the exit of a component of our Best Buy Health business that was finalized during the second quarter of fiscal 2026. In addition, we also made significant changes to reduce our exposure to tariffs, particularly in China. We currently do not expect to incur material future restructuring charges related to this initiative and no material liability remains as of August 1, 2026. 9 Table of Contents Fiscal 2024 Restructuring Initiative During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to align field labor resources with where customers want to shop and to optimize the customer experience, redirect corporate resources for better alignment with our strategy and right-size resources to better align with our revenue outlook for fiscal 2025. We do not expect to incur material future restructuring charges related to this initiative. The only remaining restructuring accrual related to this initiative relates to our Domestic segment and was as follows ($ in millions): Termination Benefits Balance at January 31, 2026 $ 31 Cash payments ( 3 ) Adjustments (1) ( 2 ) Balance at August 1, 2026 $ 26 (1) Represents subsequent adjustments to previously planned organizational changes, primarily related to higher-than-expected employee retention. Our restructuring accrual liability related to termination benefits of $ 26 million as of August 1, 2026, reflects expected future cash payments primarily during fiscal 2028. 3. Goodwill Goodwill balances by segment were as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment (1) Gross Carrying Amount Cumulative Impairment Domestic $ 1,450 $ ( 660 ) $ 1,450 $ ( 660 ) $ 1,450 $ ( 542 ) International 608 ( 608 ) 608 ( 608 ) 608 ( 608 ) Total $ 2,058 $ ( 1,268 ) $ 2,058 $ ( 1,268 ) $ 2,058 $ ( 1,150 ) (1) In the third quarter of fiscal 2026, we recorded a goodwill impairment of $ 118 million within the Domestic segment for the Best Buy Health reporting unit. 4. Fair Value Measurements Recurring Fair Value Measurements Financial assets and liabilities accounted for at fair value were as follows ($ in millions): Fair Value as of Balance Sheet Location (1) Fair Value Hierarchy August 1, 2026 January 31, 2026 August 2, 2025 Assets Money market funds (2) Cash and cash equivalents Level 1 $ 77 $ 143 $ 78 Time deposits (3) Cash and cash equivalents Level 2 201 252 258 Commercial paper (3) Cash and cash equivalents Level 2 - 37 - Money market funds (2) Other current assets Level 1 125 123 123 Time deposits (3) Other current assets Level 2 30 30 40 Marketable securities that fund deferred compensation (4) Other assets Level 1 42 41 40 Liabilities Interest rate swap derivative instruments (5) Long-term liabilities Level 2 8 1 - (1) Balance sheet location is determined by the length to maturity at date of purchase and whether the assets are restricted for particular use. (2) Valued at quoted market prices in active markets at period end. (3) Valued at face value plus accrued interest at period end, which approximates fair value. (4) Valued using the performance of mutual funds that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis. (5) Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. See Note 5, Derivative Instruments , for additional information. 10 Table of Contents Nonrecurring Fair Value Measurements In the second quarter and first six months of fiscal 2026, we recorded asset impairments and other costs as a result of restructuring initiatives that commenced in the first and second quarters of fiscal 2026. These nonrecurring fair value remeasurements were based on significant unobservable inputs (Level 3). Refer to Note 2, Restructuring , for additional information. Fair Value of Financial Instruments Long-term debt is presented at carrying value on our Condensed Consolidated Balance Sheets. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. Long-term debt balances were as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Long-term debt (1) $ 1,066 $ 1,142 $ 1,089 $ 1,149 $ 1,077 $ 1,150 (1) Excludes debt discounts, issuance costs and finance lease obligations. 5. Derivative Instruments The net notional amounts of our derivative instruments were as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Derivatives designated as net investment hedges $ 119 $ 119 $ 119 Derivatives designated as fair value hedges (interest rate swaps) 500 500 500 No hedge designation (foreign exchange contracts) 46 34 62 Total $ 665 $ 653 $ 681 Effects of our fair value hedges included in Interest expense on our Condensed Consolidated Statements of Earnings were as follows ($ in millions): Gain (Loss) Recognized Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Interest rate swaps $ - $ 9 $ ( 7 ) $ 15 Adjustments to carrying value of long-term debt - ( 9 ) 7 ( 15 ) Total $ - $ - $ - $ - 6. Debt Short-Term Debt U.S. Revolving Credit Facility We have a $ 1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2030. There were no borrowings outstanding under the Five-Year Facility Agreement as of August 1, 2026, January 31, 2026, or August 2, 2025. 11 Table of Contents Long-Term Debt Long-term debt consisted of the following ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Notes, 4.45 %, due October 1, 2028 ("2028 Notes") $ 500 $ 500 $ 500 Notes, 1.95 %, due October 1, 2030 ("2030 Notes") 650 650 650 Interest rate swap valuation adjustments ( 8 ) ( 1 ) - Subtotal 1,142 1,149 1,150 Debt discounts and issuance costs ( 5 ) ( 5 ) ( 6 ) Finance lease obligations 32 32 30 Total long-term debt 1,169 1,176 1,174 Less current portion 11 11 10 Total long-term debt, less current portion $ 1,158 $ 1,165 $ 1,164 Fair Value and Future Maturities See Note 4, Fair Value Measurements , for the fair value of long-term debt. The 2028 Notes mature in fiscal 2029 and the 2030 Notes mature in fiscal 2031. 7. Revenue We generate most of our revenue from contracts with customers from the sale of products and services. Contract balances primarily relate to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, unredeemed gift cards and deferred revenue from our private label and co-branded credit card arrangement. Contract balances were as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Receivables, net (1) $ 545 $ 538 $ 486 Short-term contract liabilities included in: Unredeemed gift card liabilities 216 235 230 Deferred revenue 912 900 889 Accrued liabilities 75 57 60 Long-term contract liabilities included in: Long-term liabilities 191 205 213 (1) Receivables are recorded net of allowances for expected credit losses of $ 14 million, $ 17 million and $ 14 million as of August 1, 2026, January 31, 2026, and August 2, 2025, respectively. During the first six months of fiscal 2027 and fiscal 2026, $ 802 million and $ 853 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods. Estimated revenue from our contract liability balances expected to be recognized in future periods if the performance of the contract is expected to have an initial duration of more than one year is as follows ($ in millions): Fiscal Year Amount Remainder of fiscal 2027 $ 19 Fiscal 2028 34 Fiscal 2029 29 Fiscal 2030 28 Fiscal 2031 27 Fiscal 2032 26 Thereafter 63 See Note 11, Segments , for revenue information by segment and category. 12 Table of Contents 8. Earnings per Share Reconciliations of the numerators and denominators of basic and diluted earnings per share were as follows ($ and shares in millions, except per share amounts): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Numerator Net earnings $ 315 $ 186 $ 591 $ 388 Denominator Weighted-average common shares outstanding 211.3 211.5 210.8 211.8 Dilutive effect of stock compensation plan awards 1.4 0.5 1.3 0.7 Weighted-average common shares outstanding, assuming dilution 212.7 212.0 212.1 212.5 Potential shares which were anti-dilutive and excluded from weighted-average share computations - 0.2 0.2 0.1 Basic earnings per share $ 1.49 $ 0.88 $ 2.80 $ 1.83 Diluted earnings per share $ 1.48 $ 0.87 $ 2.79 $ 1.82 9. Repurchase of Common Stock On February 28, 2022, our Board of Directors approved a $ 5.0 billion share repurchase program. The program had $ 3.0 billion remaining available for repurchases as of August 1, 2026. There is no expiration date governing the period over which we can repurchase shares under this authorization. Information regarding the shares we repurchased and retired was as follows ($ and shares in millions, except per share amounts): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Total cost of shares repurchased $ 37 $ 67 $ 37 $ 167 Average price per share $ 82.19 $ 68.65 $ 82.19 $ 66.03 Number of shares repurchased and retired 0.4 0.9 0.4 2.5 10. Contingencies We are involved in a number of legal proceedings. Where appropriate, we have made accruals with respect to these matters, which are reflected on our Condensed Consolidated Financial Statements. However, there are cases where liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. We provide disclosure of matters where we believe it is reasonably possible the impact may be material to our Condensed Consolidated Financial Statements. 11. Segments Revenue Category Reclassification Beginning in the first quarter of fiscal 2027, we reclassified certain amounts within our revenue categories to better align with management's current view of the business. The reclassification primarily relates to credit card revenue and digital content revenue (including digital gaming, software and subscriptions) that were previously included in various product revenue categories and, following the reclassification, are now included within services revenue. The reclassification impacts only the presentation of revenue by category and does not affect previously reported total revenue, net earnings or cash flows. 13 Table of Contents The key components of each revenue category are now as follows: • Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches); • Consumer Electronics - digital imaging, health and fitness products, home theater (including accessories, soundbars and televisions), portable audio (including headphones and portable speakers) and smart home; • Appliances - large appliances (including dishwashers, laundry, ovens and refrigerators) and small appliances (including blenders, coffee makers, vacuums and personal care); • Entertainment - drones, gaming (including hardware, peripherals and certain software, as well as AI glasses and trading cards), toys and virtual reality; • Services - advertising, credit card revenue, digital content (including digital gaming, software and subscriptions), fulfillment, health-related services, installation, marketplace commissions, memberships, repair, technical support and warranty-related services; and • Other - other product offerings (including baby, food and beverage and outdoor living). Revenue information by segment and category was as follows ($ in millions): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 (1) August 1, 2026 August 2, 2025 (1) Domestic: Computing and Mobile Phones $ 4,127 $ 3,866 $ 8,014 $ 7,603 Consumer Electronics 2,451 2,324 4,602 4,539 Appliances 1,041 1,045 1,882 2,024 Services 824 775 1,610 1,524 Entertainment 585 624 1,133 1,022 Other 42 64 78 113 Total Domestic revenue 9,070 8,698 17,319 16,825 International: Computing and Mobile Phones 336 339 679 656 Consumer Electronics 198 197 378 368 Appliances 70 79 123 135 Services 48 48 97 95 Entertainment 50 68 101 109 Other 7 9 18 17 Total International revenue 709 740 1,396 1,380 Total revenue $ 9,779 $ 9,438 $ 18,715 $ 18,205 (1) Amounts for the three and six months ended August 2, 2025, have been recast to conform to the current presentation. See Revenue Category Reclassificatio n, above, for additional information. 14 Table of Contents Adjusted operating income by segment and the reconciliations to consolidated earnings before income tax expense and equity in income of affiliates were as follows ($ in millions): Three Months Ended August 1, 2026 August 2, 2025 Domestic (1) International Total Domestic (1) International Total Revenue $ 9,070 $ 709 $ 9,779 $ 8,698 $ 740 $ 9,438 Cost of sales 6,890 551 7,441 6,665 579 7,244 Adjusted SG&A (2) 1,776 145 1,921 1,682 143 1,825 Adjusted operating income $ 404 $ 13 417 $ 351 $ 18 369 Restructuring charges ( 6 ) 114 Intangible asset amortization 2 4 Operating income 421 251 Other income (expense): Loss on disposal of subsidiaries - ( 4 ) Investment income and other 20 18 Interest expense ( 11 ) ( 12 ) Earnings before income tax expense and equity in income of affiliates $ 430 $ 253 (1) Domestic segment Adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S. (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions. Six Months Ended August 1, 2026 August 2, 2025 Domestic (1) International Total Domestic (1) International Total Revenue $ 17,319 $ 1,396 $ 18,715 $ 16,825 $ 1,380 $ 18,205 Cost of sales 13,185 1,090 14,275 12,884 1,078 13,962 Adjusted SG&A (2) 3,372 288 3,660 3,261 280 3,541 Adjusted operating income $ 762 $ 18 780 $ 680 $ 22 702 Restructuring charges ( 15 ) 223 Intangible asset amortization 4 9 Operating income 791 470 Other income (expense): Loss on disposal of subsidiaries - ( 4 ) Investment income and other 39 33 Interest expense ( 22 ) ( 24 ) Earnings before income tax expense and equity in income of affiliates $ 808 $ 475 (1) Domestic segment Adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S. (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions. 15 Table of Contents Cash flow and other expense information by segment was as follows ($ in millions): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Capital expenditures Domestic $ 166 $ 161 $ 311 $ 311 International 18 14 33 30 Total capital expenditures $ 184 $ 175 $ 344 $ 341 Depreciation and amortization Domestic $ 182 $ 201 $ 364 $ 402 International 13 10 25 20 Total depreciation and amortization $ 195 $ 211 $ 389 $ 422 Asset information by segment was as follows ($ in millions): August 1, 2026 January 31, 2026 August 2, 2025 Domestic $ 14,742 $ 13,407 $ 13,926 International 1,365 1,263 1,327 Total assets $ 16,107 $ 14,670 $ 15,253 16 Table of Contents