Ladies and gentlemen, thank you for standing by. Welcome to Best Buy's Third Quarter Fiscal '26 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for playback and will be available by approximately 1:00 p.m. Eastern time today. [Operator Instructions] I will now turn the conference call over to Mollie O'Brien, Head of Investor Relations.

Thank you, and good morning, everyone. Joining me on the call today are Corie Barry, our CEO; Matt Bilunas, our Chief Financial and Strategy Officer; and Jason Bonfig, our Chief Customer Product and Fulfillment Officer. During the call today, we will be discussing both GAAP and non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and an explanation of why these non-GAAP financial measures are useful can be found in this morning's earnings release, which is available on our website, investors.bestbuy.com. Some of the statements we will make today are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may address the financial condition, business initiatives, growth plans, investments and expected performance of the company and are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company's current earnings release and our most recent Form 10-K and subsequent Form 10-Q for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of the call. And now I will turn the call over to Corie.

Good morning, everyone, and thank you for joining us. Today, we are very pleased to report strong results for the third quarter. On revenue of $9.7 billion, we delivered an adjusted operating income rate of 4% and increased our adjusted earnings per share 11% year-over-year to $1.40. We delivered better-than-expected comparable sales growth of 2.7%. Our better-than-expected profitability was due to the higher revenue and lower-than-expected SG&A expenses. We continue to drive strong sales performance across computing, gaming and mobile phones. We also saw growth in other categories, including wearables and headphones. This growth was partially offset by declines in the home theater, appliance and drone categories. In computing, we delivered our seventh consecutive quarter of positive comps with sales growth coming from across the assortment and price points. This is due to continued momentum driven by customers' need to replace and upgrade products, combined with our unique blend of broad assortment and expert advice, service and support. We were there for students and their families no matter their budget, and we're pleased with our back-to-school sales performance. We were also focused on helping customers get what they needed to transition to Windows 11 as Microsoft ended support for the Windows 10 operating system mid-October. This contributed to our comparable sales performance evidenced by strong Windows-based sales overall and almost 30% year-over-year growth in desktop computers. In gaming, we continue to see strong demand for the Nintendo Switch 2, as expected, the growth rate slowed from the more material Q2 launch time frame. We also continue to see healthy demand for handheld gaming and augmented reality glasses. In mobile phones, we leveraged our expanded partnerships and in-store operating model improvements with the largest carriers to drive strong sales growth across phones. Our Q3 Enterprise comparable sales were driven by growth…

Good morning. Let me start with an overview of how the third quarter performed versus expectations we shared with you last quarter. Enterprise comparable sales growth of 2.7% exceeded our outlook of being similar to our second quarter growth of 1.6%. Our adjusted operating income rate of 4% was 30 basis points better than expected, which was largely driven by lower-than-planned SG&A expense. I will now talk about our third quarter results versus last year. Enterprise revenue of $9.7 billion increased 2.4% versus last year. Our adjusted operating income rate increased 30 basis points compared to last year, and our adjusted diluted earnings per share increased 11% to $1.40. By month, our Enterprise comparable sales were up approximately 3% in August, 1% in September and 5% in October. In our Domestic segment, revenue increased 2.1% to $8.9 billion, driven by comparable sales growth of 2.4%. Our online revenue of $2.8 billion increased 3.5% on a comparable basis and represented 31.8% of our domestic revenue. Our online comparable sales growth includes net commission revenue earned from our third-party marketplace sellers. From an organic standpoint, the blended average sales price of our products was approximately flat to last year, with the unit growth being the primary driver of our sales growth. International revenue of $794 million increased 6.1% versus last year. The revenue increase was primarily driven by comparable sales growth of 6.3% and revenue from Best Buy's Express locations that are not yet included in comparable sales. The previous items were partially offset by the negative impact from foreign exchange rates. From a category standpoint, the largest drivers of international comparable sales growth were computing and mobile phones. Our domestic gross profit rate decreased by 30 basis points to 23.3%. This was primarily due to lower product margin rates partially offset…

[Operator Instructions] Your first question comes from Simeon Gutman with Morgan Stanley.

Nice third quarter. I wanted to ask about the puts and takes on Q4. It looks like the comp maybe be light from what we were expecting standing from the second quarter, meaning once you guided the prior quarter, but a little bit better on profit. So can you talk about -- I guess there's a lot of scenarios what could amount, but how you set up your fourth quarter guide? And any difference in thinking from when we talked about it 3 months ago?

Yes. Overall, the high end of our Q4 guide from a sales perspective is pretty similar to what we guided the last time, maybe just a little bit lower. We did raise the bottom end of that sales guide from something that was implied to down 4% or maybe more to the number we talked about here today of down 1%. So feeling good about where sales are effectively similar to where we expect them to be on the August call. On the EBIT side, we actually slightly lower the EBIT expectations from what we would have implied last Q4 of closer to 5%. So most of that was on the low end. We did have a little bit more rate pressure on the low end because we have adjusted the revenue expectations, and therefore, the incentive compensation changed a little bit. So overall, at the high end, not a very big difference from what we would have implied in the guide on the August call.

Okay. And then the follow-up, based on the adoption of either Switch 2 or other things in entertainment as well as iPhone. What do the curves look like? Meaning, does it portend that you have another year's worth of good momentum? Like is a lot of demand pent-up? How do you think about it as you go into fourth quarter and into next year?

Sure. I mean, I think for -- to support the fourth quarter guide, we are still expecting growth on the computing side and mobile phones. Computing is still going to be fueled by the need to replace and upgrade and plus all the ongoing innovation around AI. That will continue into Q4 and likely continue into next year as we still see that there are millions of people who have yet to upgrade the Win 10 device and there's further opportunities even on the Mac side of the business, who haven't upgraded to the newest chip technology. You think about mobile phones is expected to continue to grow as we get into Q4 likely as we get into next year as well. We are seeing continued benefit from the in-store improvements with the carriers. On the entertainment side, as again in Q4, we still expect to see Switch help us grow in Q4, but on the other console side, that will likely slow as you get into -- they're just later stages of the replacement cycle of those 2 other consoles, plus, there's been some pretty transparent price increases that are obviously probably having a little bit of an impact. As you get into next year, likely still a little opportunity before we lap the Switch 2 launch midway through the year. We are expecting to see improved trends on the TV side as we get into Q4. We have very competitive pricing. We've put more marketing into the business, and with additional labor and just some changes to the service offers, we feel like that's going to help us improve the trends on the TV side as well. We are seeing already some improvements on the unit -- actually saw units grow a little bit in Q3 on the TV. So that is helpful. And plus, we have a lot of other initiatives. We have the marketplace that's continuing to ramp and scale as we get into Q4. So we feel really great about that, especially as we get into marketplace next year and being able to scale even more along with the ads business.

The next question comes from Peter Keith with Piper Sandler.

Nice quarter. I'd like to just follow up, Matt, on that last response on the Q4 outlook for comp because it does seem like you have quite a bit of momentum coming out of Q3 and some product momentum for the holiday. So what's driving the decel in the overall outlook vis-a-vis Q3?

Yes. Let me just start at a high level for Q3. Like I said, we were expecting a pretty similar Q4 guide overall from a sales perspective. Q3, if I start back in Q3, it did come in a bit better than we expected. We saw a strong back-to-school period. We saw a strong October with Techtober in the early part of the year. So we are seeing a positive growth as we go into Q4, although the Q4 did see some growth last year versus Q3 that saw a little bit of more -- saw some sales pressure. So the comparisons get a little bit tougher as you get into Q4. Obviously, the holiday is never easy to predict. What we do believe is the -- we have a range of scenarios and the range we've provided gives us a great place to plan our business operationally. Some of the categories that changed a little bit in terms of sales growth momentum as you get in from Q3 to Q4. Gaming, we are expecting it to grow overall, but maybe not at the same pace that we saw in Q3 and Q4. Wearables will be another category. I would say probably aren't going to see the same type of growth that we had saw in Q3.

Okay. Helpful. And then maybe another question for Corie on marketplace. How is it going now that it's rolled out? Do you still expect it will have a positive impact on EBIT this year? It sounds like you've shared some helpful KPIs. Are there any challenges now that it's out live? Just kind of give some of the puts and takes that you're seeing on that launch?

Yes. I'm incredibly proud of the work the team has done to launch the marketplace in a very omni-channel way. We mentioned now more than 1,000 sellers that we onboarded in a quarter and 11x more SKUs. So right away, we can see customers looking for that broader assortment. We can see them leaning into some of the unit growth that we were looking for in places like accessories where you can have a much deeper assortment or small appliances where again, you have that ability to have more breadth across what we're doing. So we're really happy with that. We did hit a few of those points on the call where we're seeing that high unit sales in categories, we're seeing return rates be actually a little bit less than what we're seeing in first party and 80% of those returns coming back to stores. We really like the customer experience metrics we're seeing. And so in general, those kind of early indicators really feel healthy and good to us, but it still is really early in the ramp. And we want to make sure we give ourselves enough time to create the kind of scale that we're going to see throughout Q4. But we're excited with the progress that we're making and how quickly we've been able to broaden that assortment how much our customers are leaning into that broader assortment for us.

Yes. Regarding the OI rate impact for the year, I think we had previously said we thought maybe it would be a little bit of a rate improvement for the enterprise for the year. We're now expecting that to be a bit more neutral. Nothing super material has changed in our outlook. There's been just a little bit of a different product mix and a little bit slower ramp than we would have had originally modeled. So again, we never really expected it to have a really huge impact to the rate this year, but more neutral this time at this quarter end.

The last thing I'd say, Peter, I think the great part about having this, especially as we head into Q4, is it just really extends the amount of giftable items that we have for our customers. And the teams are finding really interesting ways to highlight these new extended assortments. So as you look on our global homepage or as you look at search, we're finding new ways to kind of pull the depth of this assortment up. So people really realize there's a lot more out there that our customers can find to be the perfect gift giver.

The next question comes from Joe Feldman with Telsey Advisory Group.

So I wanted to touch on the loyalty program a bit. And just if you could share some more details on how that's been performing. It seems like it's been a good driver for much of the year. I don't recall hearing too much this morning on it. So I was just curious if you could share some thoughts.

Yes. I mean, obviously, our membership program remains a really important part of our customer experience and the way in which we engage with our customers. We have more than 100 million members across our 3 tiers, obviously, the free -- my Best Buy membership is the one that has the greatest reach. But on the paid membership side, which is Best Buy Plus, Best Buy Total, we ended the year with nearly 8 million paid members, and that was up from 7 million the year before. And what our focus is right now is how can we continue to drive real value and unique offers for those members. And so one of the things that we have found to be really working well for us is the strategic use of some very personalized promotions. And it's where we can use the breadth of our data to really try to reengage maybe some of those customers who haven't been engaged with us. You can use this data we have about our customers plus the signals we're seeing from customers in the way that they're shopping and really target them carefully with offers, which we're finding is a very unique way for us to reengage those customers who maybe would have lapsed or wouldn't have been shopping with us this holiday season. And another piece that we tried and we have talked about is a deep discount on the NFL Sunday ticket for Plus and Total members, so more of that idea of because you're a member with us, are there other ancillary, especially services and subscriptions that might really resonate. And we're going to continue to test and try and build on those learnings across our membership. The goal no matter what is consistent. We want to drive engagement. We want to increase the share of wallet and we want to use this as another tool that helps us fuel our ads business. And so I think the evolutions that you'll continue to see from here will all be based in continuing to fulfill that goal for our customers.

That's great. And then just maybe shifting gears a little bit and may be early, but I did want to ask about how are you thinking about stores and store investment for the coming year? You've done a lot of things to keep tweaking the model and trying different things inside the stores. And I'm just curious how your initial thoughts for next year would look.

Yes, I'm going to start where I always start, which is our stores are incredibly crucial assets. They provide not only differentiated experiences, not only differentiated services but also amazing multichannel fulfillment options. We still are running at 46% in-store pickup no matter what all of the advancements that we made in terms of shipping speed are. So this is a really important asset base for us. And we've been very consistent, and this is true for this year and it will bleed into next year. Our focus right now is on great store look and feel. And so a lot of our capital investments this year have been about ensuring that we're really investing in that look and feel. We've listed a number of the ways we're doing that both ourselves and in partnership with our vendors. And that will continue as we think into next year as we continue to refresh and make sure that we feel like our store updates reflect those great immersive experience in places like AR and gaming and TVs, small appliances, many of the categories that we've talked about, including the experiences that we're driving in mobile in partnership with some of our vendors. We do have some cohort of stores where they're a little bit larger than what we need. And so we've been working on several different ways. And this, again, will move into next year, including relocations, resizing some of the existing formats, now we're looking at some of the new and more innovative ways where maybe we can consolidate the space and bring partners like the IKEA pilot is a great example of that. But you can imagine there's a multitude of partners who might be interested in having some of that shop-in-shop space. And then finally, we've talked…

The next question comes from Greg Melich with Evercore.

Two questions. First, on tariffs. Could you just update us on how much of that do you think has actually flowed through to on the shelf AUR at this point? Is it all in the numbers now or the base?

Yes. Overall, like we talked about in the prepared remarks, our ASP at an enterprise level is essentially pretty flat year-over-year. And most of the growth is coming from the unit side of the business. So that would infer that all of the tariff changes that we would have made on select portions of our assortment would be flowing through in the price. Again, that those -- any tariff increases we would have had were only on small portions of the assortment overall. The effective tariff rate is probably still in the mid-teens, if you will. But that is not what the actual price increases on those portions of assortment that the rate is they were close to that number. So all of that would be implied in the ASP generally being flat year-over-year. What's different about our industry in that is that it's a very -- as you know, very promotional industry. And so even though their tariffs we have to be competitively priced all the time to be competitive. And so that sometimes will mute the overall impact to ASPs. Also we have product at every part of someone's budget, whether you're in computing or TVs. And so any product mix changes, assortment changes can also have an impact on ASPs as well. So overall, they are included, but we're all seeing pretty competitively priced industry and our ASPs, like I said, are not necessarily the one that's not driving our business overall. It's more on the unit side.

I just want to lift up one thing that Matt said. Our #1 focus is on our customer and ensuring we have every price point and every budget available. And one of the interesting things when we looked at our price bands, you can imagine we're looking at how many SKUs we have in each price band in a couple of our largest categories year-over-year, very similar amount of SKUs by price band. And so I think the team is doing an amazing job staying focused on having that breadth of assortment regardless of, to Matt's point, whether or not we have a few small price adjustments coming through so that whatever the budget is, we're there for them, and that will be the goal through the holiday.

Got it. Makes a lot of sense. I'd love to follow up on labor and working with vendors. Could you just level set us on how much of the store has some vendor support into labor? I think you said that you're adding TVs recently. And just -- I'd love to hear how that really helps engagement score with customers when you have vendors funding some of the labor in the store?

The amount of vendor labor is not a static answer. It flexes and kind of depends on both time of year and, of course, launches or innovation as different vendors choose to lean in and lead out at various points in time. I think one of the differences in our model when it comes to labor is we actually have a number of different ways in which we interact with customers from a labor perspective. We have everything from kind of that adviser who can flex over the whole store all the way into our own specialized category labor or something like an appliance pro who really understands appliances, all the way into vendor labor, which the team, again, I give them a lot of credit, has done a great job. That is a very close partnership between us and our vendors. And in most cases, that is our labor that we are training and deploying that is, of course, more trained against that particular vendor assortment, but is part of our broader umbrella of labor here at Best Buy. And then sometimes, we have a few examples where we also have just flat out vendor-provided labor that's in our stores. And what I think we've gotten good at is the operating model amongst all of those different types of labor. So you know when to hand off to a specialist who might have more experience in a certain product. And those specialists also understand when it's time to maybe hand back off to someone who might be more of a generalist because they want to go shop a different department. And so that when we concentrate on how does the operating model work at Best Buy, it is embracing that vendor partnership labor, but also ensuring it stays consistent with the culture, the values, the way that we think about serving the customer here at Best Buy.

The next question comes from Jonathan Matuszewski with Jefferies.

Corie, you referenced Agentic Commerce. I was curious if you could expand there how you think about the top line and potential margin benefits from the prospects of something like instant checkout? And if you have any time line slated for integration, that would be great.

My time line is fast. How's that? But at the same time, joking aside, you really have to prioritize not just where is the incremental margin flow through, but what does the customer experience really look like, and particularly in a business like ours that often includes maybe scheduled delivery, maybe installation, maybe services or membership. You really need to think about in instant checkout. How do you want those experiences to translate for the customer. And that's just when we're talking about the actual transaction point. More broadly, we want to make sure we're thinking about how does our brand, how does our specific knowledge of our customers show up and how is it helpful to customers as they're using a variety at this point of agentic tools. So we're obviously working quickly to make sure that we are relevant and showing up in the right places. But most important for us is protecting the customer experience, so that, that stays consistent with how we would want them to experience our own digital assets.

That's helpful. And then, Matt, how should we think about the magnitude of hiring and technology spend for retail media maybe next year versus what took place in 2025, trying to understand maybe how much of the neutral operating margin impact for this business is being constrained by elevated investments this year?

Yes, thanks. We're not obviously going to guide next year, but I do think as it relates to how we're thinking about next year at a high level, we're clearly seeing some sales momentum this year, and we would hope to be able to continue to drive continued momentum on the sales side as we get into next year and obviously, higher sales helps from a rate leverage perspective. It is likely true that as we get into next year for some of our initiatives, we're going to need to continue to invest in those marketplace and the ads business, exactly how much and how much flows through still haven't completed the math on that quite yet. But that is something we want to do because over the long period of time, it's going to help us drive more rate and fuel our other parts of our business over the long term, and we think that it's a good trade-off. So exactly how much that looks next year, hard to say, but we do think it's an accretive thing for us over the 1- to 3- to 5-year period.

The next question comes from Seth Sigman with Barclays.

I wanted to ask about SG&A. You were able to manage that down quite a bit this quarter despite the best sales growth in more than 4 years. So just curious, was there anything unique this quarter you could unpack that, that would be helpful. And then I'm just curious, does SG&A need to come back more as you think about a scenario where comps remain positive, what does the normal operating leverage in the business look like?

Yes. I mean, for Q3, I think we did see a rate favorability on the SG&A side. A lot of that came from the higher-than-expected sales expectation and higher sales year-over-year. We did see a combination of a few things coming better than we expected, like lower technology spend, a little bit lower labor spend in the quarter. Again, nothing -- we also had a few smaller settlements that also helped us in the quarter as well. Those things -- none of them were dramatic, but a lot of that SG&A favorability on the rate is just coming from the leverage we get on the sales in terms of our performance. So as we get into next year, again, not guiding, but there's places where we're obviously always have a little bit of inflation as we go year-to-year in terms of wages and whatnot, we'll factor those in. And there's some places where we feel like we're going to need to continue to invest to drive long-term growth. We just talked about a couple of marketplace in the ads business. So -- but that would be our goal to be able to drive sales over the long term and get rate leverage as we grow that sales exactly how much. We're still -- like I said, we're still doing the math on that next year. But we have been really good about finding operational efficiencies and cost reductions to kind of help offset the pressures that we have. We've been doing that for years. We would continue to expect to be able to do that. We've talked a lot about those places in the past where and we're using kind of new data-driven sourcing around our supply chain. We have a primary relationship with FedEx as a partial carrier. We've talked about the automated guided vehicles in our warehouses, which we continue to test and roll out. And then there's just a lot of efficiencies through technology and analytics that we can help with our partners, drive more efficiencies around customer supporting capabilities and just future AI opportunities as it relates to a lot of our business areas overall. So there are places for us to kind of offset some of those pressures that do come every year like we've been doing. And so we feel like over the long term, that would be our intent is to try to drive more profitability in our business as we grow the sales.

Okay. That's helpful. And then, obviously, great to see comps positive, but I want to ask about the categories that are not performing as well, what needs to happen for the CE category and the appliance category to get back to growth?

Thanks for the question. The appliance category is probably the most difficult one that we have in the market today, the vast majority of the appliance market is duress customers, meaning that they're replacing a product that is broken in some way. We're also seeing a very high amount of single unit purchases, meaning a washer breaks, they're not replacing the washer and dryer repair, they're just replacing the washer, which is just very different than what generally happens in the market, and that is a very high percentage in total, which means that promos are not as effective as they are in total because you're dealing with a fixed customer base. We also don't have a Pro business. And really, our sweet spot is primarily premium and packages in historic years. Really, what we have to do is shift our model a little bit. So we're looking at increasing our labor coverage in the department, also looking at focusing on delivery and speed of delivery in particular, which is critical in a duress market, and then also looking at even having opportunities in some of our stores for a customer to be able to take the product with them that day, which is also something that is emphasized more in the market that we're in. So looking to adjust our model until it flips back a little bit more towards our sweet spot, which is, again, that premium in packages, but we really need to meet the customer where they're at in a very duress market. And hopefully, as housing and different things change, then the market starts to swing back to something that might be a little bit more normal.

On the TV side, I would just make a couple of comments there. Our revenue performance did improve sequentially, even though it was still down year-over-year. What's interesting is that our unit performance really accelerated and moved to slight growth in the quarter. And so you can see some of the industry-wide ASP compression there, which we've talked about. Our share trends have improved materially on the unit side, and we believe that we're up slightly year-over-year on TV. And a lot of that is because we have invested in some of the things that we've been talking about, the sharp pricing, the increased marketing that expanded specialty labor and those expanded merchandising experiences in the stores with TCL and Hisense and LG and then augmenting that with the expanded services offerings and working on how that experience works digitally. All of that, I think the team is doing a great job putting together a more fulsome assortment and more -- even more price point options for our customers, which is at least moving that business in the right trajectory.

The next question comes from Christopher Horvers with JPMorgan.

So my first question, I'm going to try to go at the marketplace and the ads margin and accretion a little bit differently. I know that others have asked. So can you talk about what you're seeing in terms of like the benefit of both businesses to the gross margin line in the second half? And then as you think about in 2026, one would expect the revenue growth there to accelerate, is it your expectation that as the business scales, the margin rate of those businesses also accelerate? I think on our side, we think about that as strong double-digit margin rates for both businesses.

Yes. I'll break down a little bit for both the different parts of the P&L here. First, if I think about gross profit rate for both ads and marketplace, they have both helped the gross profit rate in the back half of this year. So obviously, on the marketplace side, we're scaling that business. If you think about the rate is helpful there. As we get into next year, we would continue to expect the marketplace to scale, we're clearly going to lap the launch in midway through next year, which might have an impact. But generally speaking, the more you grow it, the more GMV, the more net commissions should be helpful to the gross margin rate, not exactly not linear every quarter, depending on the scaling and when we lap. On the ad side, from a gross profit rate perspective, again, we're continuing to explore and expand into new parts of the ads business and to the extent that we are successful in driving incremental revenue and profitability from that, which we're planning to do. That would also be helpful to the gross profit rate into the future. Now again exactly how much and how it laps every quarter might not be exactly the same, but those would be the intent. On the OI rate side, I think it's going to come down to, as we talked a little bit earlier, like how much do we feel like we need to invest and what the opportunity for that investment in return looks like. And so as we get into next year, that's something we're still evaluating in terms of the technology, the people and other things that we might need to drive those 2 initiatives. We think those are the right decisions overall over time for us to drive more rate opportunities from those 2 initiatives, exactly how much flows through to OI, we're not quite ready to commit to at this point, but we do believe it's a good return for us.

And Chris, the last thing that I would add, and I know you know this, but I feel compelled. Our goal here is really to stay more relevant with the customer. And our goal is to drive more units to be there more often in consideration and to make sure that we are leveraging like partnerships. We mentioned a few on the call to stay relevant with that consumer who has so many choices. And so that part we're starting to see early green shoots on, and that becomes really the flywheel that we've been talking about that helps feed all parts of the business. And that's as much what we're focused on building and expanding next year as anything.

Got it. And then how are you planning the holiday? You mentioned a largely similar promotional calendar in an event-driven consumer, but November was tough last year, and you had a government shutdown to stop -- to start the month, as we look at monthly 2-year trends are all over the place, but the business is bending upwards. So can you talk about what you're seeing here in November, if there was any impact early in the month on the shutdown and how you're thinking about sort of the cadence over the quarter given the comparison dynamics last year?

Yes. I mean as we start Q4, we are lapping strong sales last year. As we noted on the call last year, we were running at about 5% growth for the first 3 weeks of November. I'm not sure how much the government -- we haven't done the math on specifically the government shutdown probably doesn't help. Certain geographies, obviously, are more impacted than others. But we are comping a pretty larger amount of growth through the first 3 weeks of November. So the shape of the quarter is likely going to be a little bit different this year compared to last year. November was up 4% last year. December was down 2%. So as we get into December, the compares get a little easier, and we are seeing people gravitate towards those big events that, obviously, this week and as the weeks before Christmas are the biggest events in the holidays. So we do feel like there's an opportunity there for us. So still feel like there's an opportunity for us to grow our sales. The shape will look a little different, even though the timing is pretty similar to how we saw it last year.

Your next question comes from Anthony Chukumba with Loop Capital Markets.

I know this is always kind of tough because all the different product categories that you're in, but how do you feel just at a high level in terms of market share, I mean, particularly given the fact that your sales have accelerated and you did have the best comps in several years. So how do you think about that at a high level?

I appreciate where you started, Anthony, which is it is really difficult in this industry. There just isn't a single source of share information, and there are multiple cuts. That being said, when we try to pull and triangulate all the data sources, we believe we have improved our share position over the last 2 quarters. And in Q3, we estimate that our share was flattish to slightly up. Obviously, we've always said share is a long game conversation for us and all the initiatives that we're talking about are driving toward more of the sustainability to at the highest level, drive shares. And in that, you're going to constantly be making trade-offs, promotion decisions, trade-off pricing decisions. We feel like we're strong right now, particularly in computing and gaming. I talked about our TV unit share position, which now we feel like is erring on the positive side, and there's a lot of these kind of newer categories or the expanded assortment that we're seeing in marketplace that is bolstering our point of view about how we feel like we're sitting for share. So again, always a conversation, longer game, but feel like the trajectory is headed the direction that we want.

Got it. That's helpful context. And then just real quickly on the Switch 2, obviously, that's been selling quite well and Nintendo just hiked their unit estimate for their fiscal year. How have you felt about your Switch 2 allocations relative to your initial expectations? I know you historically have over-indexed on Nintendo products, particularly relative to PlayStation and Xbox. But just love to hear your thoughts just in terms of how you feel you guys are doing from an allocation perspective.

Yes. Thank you for the question. We've actually been very happy with Switch 2 obviously, the launch was outstanding. It drove growth last quarter, and we do expect gaming to continue to grow as we lead into Q4. It's been highly publicized at the amount of Switch 2 units in the market is a lot higher than what Switch 1 was in the same time frame. So we have actually been happy with the ability to come closer to meeting customer demand. We do think demand over holiday will continue to still be very strong. And then in gaming, in general, it's not just Switch. There are other aspects of that business that are diving growth. We're just seeing a handheld in general, whether it be the new product from Asus that is a partnership with them in Xbox or other products from companies like Lenovo with their Legion Go. Just handheld gaming is a driver across the entire gaming segment. We're really excited that we think we have the best assortment there and can really meet customers' needs across anything they want to do, whether it be Switch all the way up to any aspect of handheld gaming in total. And that's really making up for some of the slowing sales that you see in just the traditional PS5 and Xbox as those get to the end of their life cycle.

And one of the things, Anthony, that's interesting about all the devices that Jason just talked about, these are pretty high price point devices. And especially considering their gaming, they tend toward kind of a younger cohort, so we really like our position here, and we're kind of doubling down both physically and digitally to make sure we offer the best possible experience. I give our teams a ton of credit as part of the reason that we're able to get the kind of allocations we can is because we can deliver these amazing experiences, especially at retail. So with that, I think that's our last question. Thanks, Anthony. Appreciate it. So I think that's our last question. Thank you all so much for joining us. We hope you all have a lovely holiday season, and we look forward to speaking with you all at the end of our year.

This concludes today's conference call. Thank you for joining. You may now disconnect.