BBYNEUTRAL

Gross Margin

20.9%

Higher than 27% of Consumer Cyclical sector peers

Updated 47h ago

Sector Performance

27th percentile

BBY

20.9%

Sector Median

36.1%

Sector Avg

30.8%

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Deep Analysis

Best Buy’s gross margin of 20.9% represents the percentage of revenue it keeps after paying the direct costs of the goods it sells — a lower number means less profit from each sale before other expenses.

This is well below the sector median of 42.3%, placing the company at the 23rd percentile among its Consumer Cyclical peers, indicating it generates a thinner markup on products than most competitors. The metric has been perfectly stable over the past eight quarters, with a year-over-year change of +0.0% and a quarter-over-quarter change of +0.0%, showing no movement in either direction. A low, flat gross margin suggests the company has limited pricing power and faces persistent cost pressures, while the lack of improvement offers no buffer against rising expenses. This combination of a below-average level and no upward trend points to ongoing competitive risk, as any cost increases would directly squeeze net income. The neutral overall verdict is supported: the stable gross margin avoids deterioration, but the low level relative to peers prevents it from being a positive signal for investors.

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 20.9% compares to a Consumer Cyclical sector median of 36.1%, placing it in the 27th percentile.

Who are BBY's closest peers by Gross Margin?

The closest Consumer Cyclical peers by Gross Margin include: BROS (22.8%), XPEV (21.3%), TSLA (21.1%), BWA (19.2%), APTV (18.1%).

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.