BBYNEUTRAL

BBY Gross Margin Analysis

23.5%

Higher than 31% of Consumer Cyclical sector peers

Updated 30h ago·SEC filings & market data

Key Takeaway

Gross margin is the percentage of sales revenue left after covering the direct cost of the goods sold, so Best Buy keeps 23.5 cents from every dollar of revenue before other expenses.

Sector Performance

31th percentile

BBY

23.5%

Sector Median

34.5%

Sector Avg

27.6%

Prior Period

20.9%(Apr 2026)

↑ Improving

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Deep Analysis

Gross margin is the percentage of sales revenue left after covering the direct cost of the goods sold, so Best Buy keeps 23.5 cents from every dollar of revenue before other expenses.

That 23.5% sits well below the sector median of 33.9%, placing the company at the 33rd percentile, meaning roughly two-thirds of Consumer Cyclical peers report higher margins. The trend is N/A: both the year-over-year and quarter-over-quarter changes are not available, so no recent direction can be confirmed from this data alone. The low margin level implies a thin profit cushion, so any cost or pricing pressure could directly hit earnings, while the absence of trend data leaves no evidence of either deterioration or repair. This supports the overall NEUTRAL verdict: the below-median margin is a valuation constraint, but with no trend signal, it creates neither additional downside risk nor an upside opportunity.

Frequently Asked Questions

What does the Gross Margin tell investors about BBY?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does BBY's Gross Margin compare to its sector?

BBY's Gross Margin of 23.5% compares to a Consumer Cyclical sector median of 34.5%, placing it in the 31th percentile.

Who are BBY's closest peers by Gross Margin?

The closest Consumer Cyclical peers by Gross Margin include: CHWY (30.1%), W (30.0%), JACK (29.9%), ROST (29.6%), RH (41.4%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.