As Best Buy Co. Inc. (NYSE:BBY) prepares to report third-quarter fiscal 2026 earnings on Nov. 25, the retailer faces a critical test that goes beyond simple sales figures: can a high-margin, “hidden” advertising business counterbalance the profitability pressure of selling lower-margin hardware?

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Building On A Breakout Quarter

While management and analysts largely expect the company to maintain the positive sales momentum established in the second quarter—its best performance in three years—the mix of products driving that growth poses a distinct challenge to the bottom line.

Management has set clear guardrails for the quarter. During the second-quarter earnings call, CFO Matt Bilunas guided for third-quarter comparable sales to mirror the 1.6% growth seen in the previous quarter, signaling that the company is trending toward the higher end of its full-year revenue guidance of $41.1 billion to $41.9 billion.

The primary tailwinds remain a "replacement cycle" in computing, driven by the aging installed base of laptops ...