BBY Best Buy Company

false--02-03Q120240000764478YesYesP5YP1YP1YP1YP1YP1YP1YP1Y00007644782022-02-2800007644782021-02-160000764478us-gaap:SubsequentEventMember2023-04-302023-05-310000764478us-gaap:CommonStockMember2023-01-292023-04-290000764478us-gaap:CommonStockMember2022-01-302022-04-300000764478us-gaap:RetainedEarningsMember2023-04-290000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-290000764478us-gaap:RetainedEarningsMember2023-01-280000764478us-gaap:AdditionalPaidInCapitalMember2023-01-280000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-280000764478us-gaap:RetainedEarningsMember2022-04-300000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-300000764478us-gaap:RetainedEarningsMember2022-01-290000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-290000764478us-gaap:CommonStockMember2023-04-290000764478us-gaap:CommonStockMember2023-01-280000764478us-gaap:CommonStockMember2022-04-300000764478us-gaap:CommonStockMember2022-01-290000764478us-gaap:EntertainmentMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478us-gaap:EntertainmentMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478bby:ServicesMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478bby:ServicesMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478bby:OtherSegmentMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478bby:OtherSegmentMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478bby:ConsumerElectronicsMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478bby:ConsumerElectronicsMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478bby:ComputingAndMobilePhonesMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478bby:ComputingAndMobilePhonesMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478bby:AppliancesMemberbby:InternationalSegmentMember2023-01-292023-04-290000764478bby:AppliancesMemberbby:DomesticSegmentMember2023-01-292023-04-290000764478us-gaap:EntertainmentMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478us-gaap:EntertainmentMemberbby:DomesticSegmentMember2022-01-302022-04-300000764478bby:ServicesMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478bby:ServicesMemberbby:DomesticSegmentMember2022-01-302022-04-300000764478bby:OtherSegmentMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478bby:OtherSegmentMemberbby:DomesticSegmentMember2022-01-302022-04-300000764478bby:ConsumerElectronicsMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478bby:ConsumerElectronicsMemberbby:DomesticSegmentMember2022-01-302022-04-300000764478bby:ComputingAndMobilePhonesMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478bby:ComputingAndMobilePhonesMemberbby:DomesticSegmentMember2022-01-302022-04-300000764478bby:AppliancesMemberbby:InternationalSegmentMember2022-01-302022-04-300000764478bby:AppliancesMemberbby:DomesticSegmentMember2022-01-302022-04-3000007644782029-02-042023-04-2900007644782028-01-302023-04-2900007644782027-01-312023-04-2900007644782026-02-012023-04-2900007644782025-01-312023-04-2900007644782024-02-042023-04-2900007644782023-01-292023-04-290000764478bby:InternationalMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-04-290000764478bby:DomesticMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-04-290000764478us-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-04-290000764478bby:InternationalMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-280000764478bby:DomesticMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-280000764478us-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-280000764478bby:InternationalMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-292023-04-290000764478bby:DomesticMemberus-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-292023-04-290000764478us-gaap:EmployeeSeveranceMemberbby:ResourceOptimizationInitiativeMember2023-01-292023-04-290000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-292023-04-290000764478us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-302022-04-300000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberbby:MarketablesecuritiesthatfunddeferredcompensationMember2023-04-290000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberbby:MarketablesecuritiesthatfunddeferredcompensationMember2023-01-280000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberbby:MarketablesecuritiesthatfunddeferredcompensationMember2022-04-300000764478bby:InternationalSegmentMember2023-01-292023-04-290000764478bby:DomesticSegmentMember2023-01-292023-04-290000764478bby:InternationalSegmentMember2022-01-302022-04-300000764478bby:DomesticSegmentMember2022-01-302022-04-300000764478bby:NotesDue2030Member2023-01-280000764478bby:NotesDue2028Member2023-01-280000764478bby:NotesDue2030Member2022-04-300000764478bby:NotesDue2028Member2022-04-300000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-04-120000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-04-290000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-01-280000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2022-04-300000764478bby:InternationalMember2023-04-290000764478bby:DomesticMember2023-04-290000764478bby:InternationalMember2023-01-280000764478bby:DomesticMember2023-01-280000764478bby:InternationalMember2022-04-300000764478bby:DomesticMember2022-04-3000007644782022-01-302023-01-280000764478us-gaap:TradeNamesMember2023-01-292023-04-290000764478us-gaap:DevelopedTechnologyRightsMember2023-01-292023-04-290000764478us-gaap:CustomerRelationshipsMember2023-01-292023-04-290000764478us-gaap:TradeNamesMember2023-04-290000764478us-gaap:DevelopedTechnologyRightsMember2023-04-290000764478us-gaap:CustomerRelationshipsMember2023-04-290000764478us-gaap:TradeNamesMember2023-01-280000764478us-gaap:DevelopedTechnologyRightsMember2023-01-280000764478us-gaap:CustomerRelationshipsMember2023-01-280000764478us-gaap:TradeNamesMember2022-04-300000764478us-gaap:DevelopedTechnologyRightsMember2022-04-300000764478us-gaap:CustomerRelationshipsMember2022-04-300000764478us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:NondesignatedMember2023-04-290000764478us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-04-290000764478us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-04-290000764478us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:NondesignatedMember2023-01-280000764478us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-280000764478us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-280000764478us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:NondesignatedMember2022-04-300000764478us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-04-300000764478us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-04-300000764478us-gaap:InterestRateSwapMember2023-01-292023-04-290000764478bby:CarryingValueOfLongTermDebtMember2023-01-292023-04-290000764478us-gaap:InterestRateSwapMember2022-01-302022-04-300000764478bby:CarryingValueOfLongTermDebtMember2022-01-302022-04-300000764478us-gaap:InterestRateSwapMember2023-04-290000764478us-gaap:InterestRateSwapMember2023-01-280000764478us-gaap:InterestRateSwapMember2022-04-300000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-04-122023-04-120000764478bby:NotesDue2030Member2023-04-290000764478bby:NotesDue2028Member2023-04-290000764478srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-292023-04-290000764478srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberbby:AlternativeBaseRateMember2023-01-292023-04-290000764478srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-292023-04-290000764478srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberbby:AlternativeBaseRateMember2023-01-292023-04-290000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2023-01-292023-04-290000764478us-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMemberus-gaap:FederalFundsEffectiveSwapRateMember2023-01-292023-04-290000764478srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-01-292023-04-290000764478srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberbby:FiveYearFacilityAgreementMember2023-01-292023-04-290000764478bby:LongTermLiabilitiesMember2023-04-290000764478bby:LongTermLiabilitiesMember2023-01-280000764478bby:LongTermLiabilitiesMember2022-04-300000764478bby:UnredeemedGiftCardsMember2023-04-290000764478bby:GiftCardMember2023-04-290000764478bby:DeferredRevenueMember2023-04-290000764478bby:AccruedLiabilityMember2023-04-290000764478bby:UnredeemedGiftCardsMember2023-01-280000764478bby:GiftCardMember2023-01-280000764478bby:DeferredRevenueMember2023-01-280000764478bby:AccruedLiabilityMember2023-01-280000764478bby:UnredeemedGiftCardsMember2022-04-300000764478bby:GiftCardMember2022-04-300000764478bby:DeferredRevenueMember2022-04-300000764478bby:AccruedLiabilityMember2022-04-3000007644782022-01-290000764478us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-04-290000764478us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-01-280000764478us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2022-04-300000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-04-300000764478bby:InternationalSegmentMember2023-04-290000764478bby:DomesticSegmentMember2023-04-290000764478bby:InternationalSegmentMember2023-01-280000764478bby:DomesticSegmentMember2023-01-280000764478bby:InternationalSegmentMember2022-04-300000764478bby:DomesticSegmentMember2022-04-300000764478us-gaap:RetainedEarningsMember2023-01-292023-04-290000764478us-gaap:AdditionalPaidInCapitalMember2023-01-292023-04-290000764478us-gaap:RetainedEarningsMember2022-01-302022-04-300000764478us-gaap:AdditionalPaidInCapitalMember2022-01-302022-04-3000007644782022-01-302022-04-3000007644782023-05-3100007644782023-01-292023-04-290000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-04-290000764478us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-01-280000764478us-gaap:FairValueInputsLevel2Memberus-gaap:DebtMemberus-gaap:DebtSecuritiesMember2023-04-290000764478us-gaap:FairValueInputsLevel2Memberus-gaap:DebtMemberus-gaap:DebtSecuritiesMember2023-01-2800007644782023-01-280000764478us-gaap:FairValueInputsLevel2Memberus-gaap:DebtMemberus-gaap:DebtSecuritiesMember2022-04-3000007644782022-04-3000007644782023-04-29xbrli:pureiso4217:USDxbrli:sharesxbrli:sharesiso4217:USD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended April 29, 2023

OR

For the transition period from            to            

Commission File Number: 1-9595

 

BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)

(612) 291-1000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  No 

The registrant had 218,210,535 shares of common stock outstanding as of May 31, 2023. 

‎

---

BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED APRIL 29, 2023

TABLE OF CONTENTS

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We disclose information to the public concerning Best Buy, Best Buy’s products, content and services and other items through our websites in order to achieve broad, non-exclusionary distribution of information to the public. Some of the information distributed through this channel may be considered material information. Investors and others are encouraged to review the information we make public in the locations below.* This list may be updated from time to time.

For information concerning Best Buy and its products, content and services, please visit: https://bestbuy.com.

For information provided to the investment community, including news releases, events and presentations, and filings with the SEC, please visit: https://investors.bestbuy.com.

For the latest information from Best Buy, including press releases, please visit: https://corporate.bestbuy.com/archive/.

*These corporate websites, and the contents thereof, are not incorporated by reference into this Quarterly Report on Form 10-Q nor deemed filed with the SEC.

‎

---

PART I — FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)

NOTE: The Consolidated Balance Sheet as of January 28, 2023, has been condensed from the audited consolidated financial statements.

See Notes to Condensed Consolidated Financial Statements. 

‎

---

Condensed Consolidated Statements of Earnings

$ and shares in millions, except per share amounts (unaudited)

See Notes to Condensed Consolidated Financial Statements.

 
‎

---

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)

See Notes to Condensed Consolidated Financial Statements.

‎

---

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)

See Notes to Condensed Consolidated Financial Statements.

‎

---

Condensed Consolidated Statements of Changes in Shareholders' Equity

$ and shares in millions, except per share amounts (unaudited)

See Notes to Condensed Consolidated Financial Statements.

‎

---

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

1. Basis of Presentation

Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the U.S. (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. The first three months of fiscal 2024 and fiscal 2023 included 13 weeks.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from April 29, 2023, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified.

Adopted Accounting Pronouncements

In the first quarter of fiscal 2024, we adopted Accounting Standards Update 2022-04 (“ASU 2022-04”), Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 requires entities to disclose the key terms of supplier finance programs they use in connection with the purchase of goods and services, along with the amount of obligations outstanding at the end of each period and an annual rollforward of such obligations. Below are the interim disclosures as a result of ASU 2022-04.

Supply Chain Financing

We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution. Under this program, the financial institution agrees to terms with our suppliers, including amounts that are eligible for early payment, the timing of such payments and the discounts. The financial institution then pays the supplier based on the payment terms agreed to. Suppliers’ participation in this program is at their own option. The financial institution can vary discounts offered at their own discretion. Our rights and obligations to our suppliers – which are typically formalized in standardized agreements – are not affected by the existence of the program. Our liability associated with the funded participation in the program, which is included in Accounts payable on our Condensed Consolidated Balance Sheets, was $490 million, $386 million and $584 million as of April 29, 2023, January 28, 2023, and April 30, 2022, respectively.

Total Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions):

Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and other self-insurance liabilities.

Reclassifications

Certain reclassifications of immaterial amounts previously reported have been made to the accompanying Condensed Consolidated Statements of Cash Flows to maintain consistency and comparability between periods presented.

---

2. Restructuring

Fiscal 2023 Resource Optimization Initiative

In light of ongoing changes in business trends, during the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure. All charges incurred related to this initiative were from continuing operations and were presented within Restructuring charges on our Condensed Consolidated Statements of Earnings.

In the first quarter of fiscal 2024, we recorded a reduction to employee termination benefits of $9 million, primarily related to higher-than-expected employee retention. Cumulative charges incurred related to this initiative as of April 29, 2023, were $136 million, comprised of $132 million and $4 million of employee termination benefits within our Domestic and International segments, respectively. We do not expect to incur material future restructuring charges related to this initiative.

Restructuring accrual activity related to the fiscal 2023 resource optimization initiative described above was as follows ($ in millions):

(1)Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes.

  

3. Goodwill and Intangible Assets

Goodwill

Goodwill balances by reportable segment were as follows ($ in millions):

No impairment charges were recorded during the periods presented.

Definite-Lived Intangible Assets

We have definite-lived intangible assets recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions):