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Earlier this week, Best Buy said it will open six new, smaller-format stores over the next year, its first meaningful physical expansion in more than a decade, targeting markets where it previously had no bricks-and-mortar presence.
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This move highlights how Best Buy is leaning into renewed demand for in-person electronics shopping, particularly among Gen Z consumers who favor store experiences.
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Next, we’ll examine how Best Buy’s decision to re-expand its store footprint could influence the company’s existing investment narrative.
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To own Best Buy, you need to believe it can turn a largely mature electronics business into a resilient cash generator, using services, vendor partnerships, and its marketplace to offset margin pressure from intense competition and promotion-heavy categories. The small-format store expansion slightly reinforces the near term catalyst of in person upgrade demand but does not fundamentally change the biggest risk today, which is ongoing pressure on gross margins from mix, pricing, and higher operating costs.
Among recent announcements, the March 2026 earnings release is most relevant here: Best Buy showed higher full year earnings and profit margins while also confirming FY2027 guidance, including modest comparable sales growth. Against that backdrop, the decision to re expand its store footprint will likely be assessed alongside existing investments in omnichannel capabilities, marketplace, and retail media as potential offsets to both margin compression and rising SG&A.
Yet while new stores may help, investors should also recognize the risk that higher store and labor costs could…
Read the full narrative on Best Buy (it’s free!)
Best Buy’s narrative projects $44.5 billion revenue and $1.5 billion earnings by 2028. This requires 2.3% yearly revenue growth and a $722.0 million earnings increase from $778.0 million today.
Uncover how Best Buy’s forecasts yield a $74.85 fair value, a 17% upside to its current price.
Some of the lowest ranked analysts were already cautious, assuming revenue around US$42.3 billion and earnings near US$1.5 billion by 2028, and they worry that new tariffs plus higher marketplace and digital investment spending could weigh more heavily on margins and growth than the consensus expects, especially if the new small format stores do not deliver the same profitability uplift others are counting on.