Best Buy (BBY) risk factors, FY2026 10-K

Best Buy's FY2026 10-K, filed Mar 18, 2026, lists 28 risk factors in 4 groups. Against the prior year's 38: 3 new, 13 dropped, 19 substantially reworded.

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Risk factors listed
284 groups
New this year
3vs 38 last year
Dropped
13since the prior 10-K
Substantially reworded
19of those kept
Section length
9k wordsItem 1A

What the changes say

  • Best Buy expanded risk disclosures around AI-driven brand impersonation, enterprise strategic execution, and retail crime near stores.

What changed since the prior 10-K

New

  • NewStrategic Risks

    Third parties may commit fraud (e.g., AI-driven fraud or impersonation of Geek Squad agents) while using our brand without our permission, possibly harming brand perception or reputation

    Third parties may commit AI-driven fraud or impersonate Geek Squad agents, while social media misinformation could harm Best Buy's brand perception and revenues.

  • NewStrategic Risks

    Failure to effectively identify, manage and execute enterprise-wide strategies could have a negative impact on our business

    Executing new strategic initiatives, acquisitions, and revenue streams like Best Buy Ads and Best Buy Marketplace introduces operational and execution uncertainties.

  • NewOperational Risks

    These risks are compounded for small parcel home deliveries, as we are dependent on a relatively small number of carriers with the scope and capacity required by our business

    Small parcel home deliveries rely on limited carriers, and global supply chain disruptions like Red Sea issues could increase transportation costs and delays.

Dropped

  • Dropped

    terrorism (including related cyber threats), civil unrest, violent acts or other conflicts

  • Dropped

    damage to our brand and reputation

  • DroppedStrategic Risks

    The execution of our strategy relating to certain products and services (including health technology, services and logistics) brings business, financial and regulatory risks

  • DroppedStrategic Risks

    Failure to effectively manage and execute strategic ventures or partnerships could have a negative impact on our business

  • DroppedStrategic Risks

    adverse impacts on relationships with employees, vendors and other key partners of our existing business or Strategic Ventures

    Catastrophic events such as terrorism, civil unrest, and violent acts disrupting workforce and supply chain.

  • DroppedOperational Risks

    consolidation or business failures in the transportation and distribution sectors

  • DroppedOperational Risks

    diseases, pandemics, outbreaks and other health-related concerns

    Vendor failures in investing in technology, facilities, advertising, and promotional activities.

  • DroppedOperational Risks

    failure to maintain consistent quality, availability and competitive pricing, which could have a material adverse impact on the demand for exclusive brand products and the profits we are able to generate from them

  • DroppedOperational Risks

    inability to source alternatives quickly enough to avoid interruptions in product supply due to disruptions, such as trade disputes or excessive tariffs

  • DroppedOperational Risks

    As we continue to expand our use of software as a service (SaaS) providers, we may face additional risks that may compromise our security or disrupt our business capabilities, including ensuring the proper configuration and dependencies on our service providers’ cybersecurity practices

    Regulatory and technological environment risks in health sector offerings like PERS and RPM.

  • DroppedOperational Risks

    We face a heightened risk of cybersecurity attacks or data security incidents, which could have a material adverse impact on our business

  • DroppedRegulatory, Compliance and Legal Risks

    the impact of changes in the federal government on laws, regulations and policies; and the potential for an increasing patchwork of state regulations

  • DroppedRegulatory, Compliance and Legal Risks

    difficulties encountered in exerting appropriate management oversight to operations in remote locations

Reworded

  • 96% rewritten

    Catastrophic events could adversely affect our operating results

    Added specific mention of key sales states California, Texas, and Florida, plus civil unrest and store security concerns.

    Was: Catastrophic events, including the effects of climate change, could adversely affect our operating results

  • 84% rewrittenStrategic Risks

    Our focus on services exposes us to certain risks that could have a material adverse impact on our revenue, profitability and reputation

    Added specific mention of unpredictable extended warranty failure rates and price pressure from lower-cost competitors on premium services.

  • 82% rewrittenStrategic Risks

    We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability

    Added risks that Best Buy's higher cost structure from superior customer service creates margin pressure against low-cost delivery competitors.

  • 81% rewrittenStrategic Risks

    Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition

    Added risks from Best Buy Marketplace third-party sellers and heightened violence and crime in or around stores.

  • 79% rewrittenOperational Risks

    We rely heavily on our information technology systems for key business processes. Any failure or interruption in these systems could have a material adverse impact on our business

    Updated IT dependencies to specify urgent response and care center services provided by Best Buy Health.

  • 74% rewritten

    Geopolitical pressures may adversely impact our supply chain, the cost of our products or revenues and financial results

    Adjusted direct import percentage from 2%-3% to 1%-3% and generalized vendor sourcing regions to China, Mexico, and Southeast Asia.

  • 67% rewrittenRegulatory, Compliance and Legal Risks

    We are subject to statutory, regulatory and legal developments that could have a material adverse impact on our business

    Added executive orders to the scope of complex compliance statutes and regulations.

  • 59% rewrittenStrategic Risks

    Failure to effectively manage our infrastructure, real estate portfolio and market segmentation strategy may negatively impact our business

    Refined wording regarding real estate portfolio management and omnichannel store operating models.

    Was: Failure to effectively manage our real estate portfolio and market segmentation strategy may negatively impact our operating results

  • 56% rewrittenOperational Risks

    Interruptions and other factors affecting our supply chain may adversely affect our business

  • 54% rewrittenOperational Risks

    Failure to prevent or effectively respond to a breach of the security or privacy of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions

    Was: Failure to prevent or effectively respond to a breach of the privacy or security of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions

  • 53% rewrittenRegulatory, Compliance and Legal Risks

    Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate

  • 47% rewrittenOperational Risks

    We are subject to risks related to the products we sell, including those products sold on our Best Buy Marketplace platform and products under our exclusive brand labels (Best Buy Essentials, Insignia, Lively, Rocketfish and Yardbird brands) that could affect our operating results

    Was: We are subject to risks related to the products we sell, including those products sold on our Marketplace platforms and products under our exclusive brand labels (Best Buy Essentials, Dynex, Insignia, Modal, Platinum, Rocketfish, Yardbird and Lively brands) that could affect our operating results

  • 46% rewritten

    Many of the products we sell are highly susceptible to technological advancement, product life-cycle fluctuations and changes in consumer preferences

  • 43% rewrittenStrategic Risks

    If we fail to attract, retain and engage qualified employees, our operations and profitability may be negatively impacted. In addition, changes in market compensation rates could adversely affect our profitability

  • 42% rewritten

    Macroeconomic pressures may adversely affect consumer spending and our financial results

  • 38% rewritten

    Any decrease in consumer demand due to macroeconomic conditions may negatively impact our financial results

  • 36% rewrittenStrategic Risks

    Our reliance on key vendors and mobile network carriers subjects us to various risks and uncertainties which could affect our revenue and profitability

  • 31% rewrittenOperational Risks

    We utilize third-party vendors for certain aspects of our operations, and any material disruption in our relationships or their services may have an adverse impact on our business

  • 29% rewrittenRegulatory, Compliance and Legal Risks

    Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to cybersecurity, corporate responsibility and sustainability matters

    Was: Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to cybersecurity and corporate responsibility and sustainability matters

All 28 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Macroeconomic pressures may adversely affect consumer spending and our financial results42% rewritten
  2. 02Any decrease in consumer demand due to macroeconomic conditions may negatively impact our financial results38% rewritten
  3. 03Geopolitical pressures may adversely impact our supply chain, the cost of our products or revenues and financial results74% rewritten
  4. 04Catastrophic events could adversely affect our operating results96% rewritten
  5. 05Many of the products we sell are highly susceptible to technological advancement, product life-cycle fluctuations and changes in consumer preferences46% rewritten

Strategic Risks

  1. 06We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability82% rewritten
  2. 07If we fail to attract, retain and engage qualified employees, our operations and profitability may be negatively impacted. In addition, changes in market compensation rates could adversely affect our profitability43% rewritten
  3. 08Our focus on services exposes us to certain risks that could have a material adverse impact on our revenue, profitability and reputation84% rewritten
  4. 09Our reliance on key vendors and mobile network carriers subjects us to various risks and uncertainties which could affect our revenue and profitability36% rewritten
  5. 10Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition81% rewritten
  6. 11Third parties may commit fraud (e.g., AI-driven fraud or impersonation of Geek Squad agents) while using our brand without our permission, possibly harming brand perception or reputationNew
  7. 12Failure to effectively identify, manage and execute enterprise-wide strategies could have a negative impact on our businessNew
  8. 13Failure to effectively manage our infrastructure, real estate portfolio and market segmentation strategy may negatively impact our business59% rewritten

Operational Risks

  1. 14Interruptions and other factors affecting our supply chain may adversely affect our business56% rewritten
  2. 15These risks are compounded for small parcel home deliveries, as we are dependent on a relatively small number of carriers with the scope and capacity required by our businessNew
  3. 16We utilize third-party vendors for certain aspects of our operations, and any material disruption in our relationships or their services may have an adverse impact on our business31% rewritten
  4. 17We are subject to risks related to the products we sell, including those products sold on our Best Buy Marketplace platform and products under our exclusive brand labels (Best Buy Essentials, Insignia, Lively, Rocketfish and Yardbird brands) that could affect our operating results47% rewritten
  5. 18We rely heavily on our information technology systems for key business processes. Any failure or interruption in these systems could have a material adverse impact on our business79% rewritten
  6. 19Failure to prevent or effectively respond to a breach of the security or privacy of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions54% rewritten

Regulatory, Compliance and Legal Risks

  1. 20We are subject to statutory, regulatory and legal developments that could have a material adverse impact on our business67% rewritten
  2. 21Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to cybersecurity, corporate responsibility and sustainability matters29% rewritten
  3. 22Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate53% rewritten

Financial and Market Risks

  1. 23Failure to meet any financial performance guidance or other forward-looking statements we may provide to the public could result in a decline in our stock price
  2. 24Failure to effectively manage our costs could have a material adverse effect on our profitability
  3. 25We are highly dependent on the cash flows and net earnings we generate during our fiscal fourth quarter, which includes the majority of the holiday shopping season
  4. 26Economic, regulatory and other developments could adversely affect our ability to offer attractive promotional financing to our customers and adversely affect the profits we generate from these programs
  5. 27Constraints in the banking and capital markets or our vendor credit terms may have a material adverse impact on our liquidity
  6. 28Changes in our credit ratings may limit our access to capital and materially increase our borrowing costs

Other Best Buy 10-Ks

  • FY2025 10-K risk factors
    38 risks

    Best Buy relies heavily on five major suppliers representing 55% of merchandise purchases. The company faces significant fourth-quarter holiday sales concentration and supply chain vulnerabilities. Expanding health technology and marketplace platforms introduce complex regulatory and operational risks.

    Filed Mar 19, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.