Best Buy (NYSE: BBY) reported significant restructuring costs in Q1 as it overhauled its health care business, which is experiencing slower-than-expected performance in its home-based care division. 

The company spent $109 million in restructuring charges during the first quarter, largely tied to the restructuring initiative in its Best Buy Health business, according to the company’s earnings report. The costs were primarily related to asset impairments.

While the company has expanded its home-based care business in recent years, it has recently encountered some complications with the segment, according to Best Buy CEO Corie Barry.

“The business that we have called active aging, our lively business or even just some of the care at home business, these remain very viable business models for the future,” Barry said on the company’s Q1 earnings call on Thursday. “Now the part that has been harder and taken longer to develop than we initially thought is some of the very discreet in-home health that we are providing in partnership with some of the health care industry.”

Barry cited two reasons for the complexities of the company’s in-home services line.

“One, by the adoption of hospital-at-home solutions at scale just being slower because, partially, the health at home waiver has been caught up in a lot of the administration’s budgeting conversations, and it’s been inconsistent in terms of how long that waiver will be in place,” Barry said. “And two, some of the health care providers have just faced their own financial struggles over the past few years. So we’ve been working to optimize that part of the health care business at Best Buy.”

The “remaining” parts of its health care business remain very viable, Barry said.

Boston-based Best Buy Health, a subsidiary of Best Buy, provides consumer health products, device-based emergency response services for aging people and virtual care.

In Q1, Best Buy’s gross profit rate increased 23.5%, up from 23.4% in 2024 – but the increase was tempered by rate pressure on its health care business.

“The higher gross profit rate was primarily due to improved financial performance from the company’s services category, including its membership offerings, which was partially offset by rate pressure within the company’s Best Buy Health business and lower profit-sharing revenue from the company’s private label and co-branded credit card arrangement,” the company’s earnings report read.

The company’s overall revenue for Q1 rang in at $8.8 billion, a 0.9% dip from the previous year.

Best Buy Health’s leaders have previously said the company is putting “the home at the center of health.”  In 2021, it acquired at-home care technology company Current Health and it launched a hospital-at-home partnership with Atrium Health in 2023.