false000076447800007644782023-08-292023-08-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 29, 2023

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BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)

Minnesota

1-9595

41-0907483

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

7601 Penn Avenue South

Richfield, Minnesota

55423

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (612) 291-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class

Trading symbol

Name of exchange on which registered

Common Stock, $0.10 par value per share

BBY

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if 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.



Item 2.02 Results of Operations and Financial Condition.

On August 29, 2023, Best Buy Co., Inc. (“Best Buy” or the “registrant”) issued a news release announcing its results of operations for the second quarter ended July 29, 2023.

The registrant is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) today, August 29, 2023. The earnings conference call is expected to be available live on the registrant’s website at https://investors.bestbuy.com.

The news release issued on August 29, 2023, is furnished as Exhibit 99 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that Section unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following are furnished as Exhibits to this Current Report on Form 8-K.

Exhibit No.

Description of Exhibit

99

News release issued August 29, 2023 (furnished pursuant to Item 2.02). Any internet address provided in this release is for information purposes only and is not intended to be a hyperlink. Accordingly, no information at any internet address is included herein.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).


2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BEST BUY CO., INC.

(Registrant)

Date: August 29, 2023

By:

/s/ MATHEW R. WATSON

Mathew R. Watson

Senior Vice President, Finance – Controller and Chief Accounting Officer

 

3

 

Exhibit 99

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Best Buy Reports Second Quarter Results

Comparable Sales Declined 6.2%

GAAP Diluted EPS of $1.25

Non-GAAP Diluted EPS of $1.22





MINNEAPOLIS, August 29, 2023 -- Best Buy Co., Inc. (NYSE: BBY) today announced results for the 13-week second quarter ended July 29, 2023 (“Q2 FY24”), as compared to the 13-week second quarter ended July 30, 2022 (“Q2 FY23”).





 

 

 

 

 

 



Q2 FY24

Q2 FY23

Revenue ($ in millions)

 

 

 

 

 

 

Enterprise

$

9,583 

 

$

10,329 

 

Domestic segment

$

8,890 

 

$

9,569 

 

International segment

$

693 

 

$

760 

 

Enterprise comparable sales % change1

 

(6.2)

%

 

(12.1)

%

Domestic comparable sales % change1

 

(6.3)

%

 

(12.7)

%

Domestic comparable online sales % change1

 

(7.1)

%

 

(14.7)

%

International comparable sales % change1

 

(5.4)

%

 

(4.2)

%

Operating Income

 

 

 

 

 

 

GAAP operating income as a % of revenue

 

3.6 

%

 

3.6 

%

Non-GAAP operating income as a % of revenue

 

3.8 

%

 

4.1 

%

Diluted Earnings per Share ("EPS")

 

 

 

 

 

 

GAAP diluted EPS

$

1.25 

 

$

1.35 

 

Non-GAAP diluted EPS

$

1.22 

 

$

1.54 

 



For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.



“Today we are reporting second quarter sales results that are at the high-end of the outlook we shared in May and profitability that was better than expectations,” said Corie Barry, Best Buy CEO. “These results continue to demonstrate our strong operational execution as we balance our reaction to the current industry sales pressure with our ongoing strategic investments.”



“Our financial results were better than expected, and they reflect a consumer electronics industry that remains challenged due to the pull-forward of demand in prior years and the various macroeconomic factors that we are all too familiar with,” Barry continued. “With that said, we continue to expect that this year will be the low point in tech demand after two years of sales declines. Next year the consumer electronics industry should see stabilization and possibly growth driven by the natural upgrade and replacement cycles and the normalization of tech innovation. I am very proud of the way our teams are managing the business and preparing for our future, and we remain incredibly excited about our future opportunities.”




 

 

 

 

FY24 Financial Guidance



“In May, we noted that we were preparing for a number of scenarios within our annual guidance range, and we believed our sales were aligning closer to the midpoint of the annual comparable sales guidance,” said Matt Bilunas, Best Buy CFO. “Today we are lowering the high-end of our full year revenue outlook to our previous midpoint, while keeping the low-end of our revenue guidance unchanged. At the same time, we are narrowing our profitability ranges, effectively raising the midpoint of our previous annual guidance for non-GAAP operating income rate and non-GAAP diluted EPS.”



Bilunas continued, “As it relates specifically to the third quarter, we expect our comparable sales to be slightly better than the negative 6.2% we reported for the second quarter and our non-GAAP operating income rate to be approximately 3.4%.”



Best Buy’s guidance for FY24, which includes 53 weeks, is the following:



·

Revenue of $43.8 billion to $44.5 billion, which compares to prior guidance of $43.8 billion to $45.2 billion

·

Comparable sales decline of 4.5% to 6.0%, which compares to prior guidance of a decline of 3.0% to 6.0%

·

Enterprise non-GAAP operating income rate2 of 3.9% to 4.1%, which compares to prior guidance of 3.7% to 4.1% 

·

Non-GAAP effective income tax rate2 of approximately 24.5%, which remains unchanged

·

Non-GAAP diluted EPS2 of $6.00 to $6.40, which compares to prior guidance of $5.70 to $6.50

·

Capital expenditures of approximately $850 million, which remains unchanged



Note: Incorporated in the above guidance, the 53rd week is expected to add approximately $700 million of revenue to Q4 FY24 and provide a benefit of approximately 10 basis points to the company’s full year non-GAAP operating income rate.2   



Domestic Segment Q2 FY24 Results



Domestic Revenue

Domestic revenue of $8.89 billion decreased 7.1% versus last year primarily driven by a comparable sales decline of 6.3%.



From a merchandising perspective, the largest drivers of the comparable sales decline on a weighted basis were appliances, home theater, computing and mobile phones. These drivers were partially offset by growth in gaming.



Domestic online revenue of $2.76 billion decreased 7.1% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was flat to last year at 31.0%. 



Domestic Gross Profit Rate

Domestic gross profit rate was 23.1% versus 22.0% last year. The higher gross profit rate was primarily due to: (1) favorable product margin rates; (2) improved financial performance from the company’s membership offerings, which included higher services margin rates and reduced costs associated with program changes made to the company’s free membership offering; and (3) an improved gross profit rate from the company’s Health initiatives. 



Domestic Selling, General and Administrative Expenses (“SG&A”)

Domestic GAAP SG&A was $1.73 billion, or 19.5% of revenue, versus $1.73 billion, or 18.1% of revenue, last year. On a non-GAAP basis, SG&A was $1.71 billion, or 19.2% of revenue, versus $1.71 billion, or 17.9% of revenue,

 

2

 


 

 

 

 

last year. Both GAAP and non-GAAP SG&A were approximately flat to last year, as higher incentive compensation was primarily offset by reduced store payroll expense.



International Segment Q2 FY24 Results



International revenue of $693 million decreased 8.8% versus last year. This decrease was primarily driven by a comparable sales decline of 5.4% and the negative impact of approximately 340 basis points from foreign currency exchange rates.



International operating income was $19 million, or 2.7% of revenue, compared to $28 million, or 3.7% of revenue, last year. The lower operating income rate was primarily driven by SG&A deleverage on lower revenue, which was partially offset by an improvement in the company’s gross profit rate of approximately 80 basis points compared to last year.



Income Taxes



The Q2 FY24 GAAP effective tax rate was 26.1% versus 15.6% last year. On a non-GAAP basis, the effective tax rate was 26.6% versus 16.7% last year. The lower GAAP and non-GAAP effective tax rates last year were primarily due to the resolution of certain discrete tax matters.



Share Repurchases and Dividends



In Q2 FY24, the company returned a total of $279 million to shareholders through dividends of $200 million and share repurchases of $79 million. On a year-to-date basis, the company has returned a total of $560 million to shareholders through dividends of $402 million and share repurchases of $158 million.



Today, the company announced that its board of directors has authorized the payment of a regular quarterly cash dividend of $0.92 per common share. The quarterly dividend is payable on October 10, 2023, to shareholders of record as of the close of business on September 19, 2023.



Conference Call



Best Buy is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on August 29, 2023. A webcast of the call is expected to be available at www.investors.bestbuy.com,  both live and after the call.



Notes:

(1) The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as other retailers’ methods. For additional information on comparable sales, please see our most recent Annual Report on Form 10-K, and our subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”), and available at www.investors.bestbuy.com. 



(2) A reconciliation of the projected non-GAAP operating income rate, non-GAAP effective income tax rate and non-GAAP diluted EPS, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measures, is not provided because the company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as restructuring charges; price-fixing settlements; goodwill impairments; gains and losses on sales of subsidiaries and certain investments; intangible asset amortization; certain acquisition-related costs; and the tax effect of all such items. Historically, the company has excluded these items from non-GAAP financial measures. The company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that

 

3

 


 

 

 

 

may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business or reaching settlement of a legal dispute, are inherently unpredictable as to if or when they may occur. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.



Forward-Looking and Cautionary Statements:

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they use words such as "anticipate," “appear,” “approximate,” "assume," "believe," “continue,” “could,” "estimate," "expect," “foresee,” "guidance," "intend," “may,” “might,” "outlook," "plan," “possible,” "project" “seek,” “should,” “would,” and other words and terms of similar meaning or the negatives thereof. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, our operating model, new strategies and growth initiatives, the competitive environment, consumer behavior and other events. These statements involve a number of judgments and are subject to certain risks and uncertainties, many of which are outside the control of the Company, that could cause actual results to differ materially from the potential results discussed in such forward-looking statements. Readers should review Item 1A, Risk Factors, of our most recent Annual Report on Form 10-K, and any updated information in subsequent Quarterly Reports on Form 10-Q, for a description of important factors that could cause our actual results to differ materially from those contemplated by the forward-looking statements made in this release. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: macroeconomic pressures in the markets in which we operate (including but not limited to inflation rates, fluctuations in foreign currency exchange rates, limitations on a government’s ability to borrow and/or spend capital, fluctuations in housing prices, energy markets, and jobless rates and effects related to the conflict in Ukraine or other geopolitical events); catastrophic events, health crises and pandemics; susceptibility of the products we sell to technological advancements, product life cycle fluctuations and changes in consumer preferences; competition (including from multi-channel retailers, e-commerce business, technology service providers, traditional store-based retailers, vendors and mobile network carriers and in the provision of delivery speed and options); our ability to attract and retain qualified employees; changes in market compensation rates; our expansion into health and new products, services and technologies; our focus on services as a strategic priority; our reliance on key vendors and mobile network carriers (including product availability); our ability to maintain positive brand perception and recognition; our ability to effectively manage strategic ventures, alliances or acquisitions; our ability to effectively manage our real estate portfolio; inability of vendors or service providers to perform components our supply chain (impacting our stores or other aspects of our operations) and other various functions of our business; risks arising from and potentially unique to our exclusive brands products; our reliance on our information technology systems, internet and telecommunications access and capabilities; our ability to prevent or effectively respond to a cyber-attack, privacy or security breach; product safety and quality concerns; changes to labor or employment laws or regulations; risks arising from statutory, regulatory and legal developments (including statutes and/or regulations related to tax or privacy); evolving corporate governance and public disclosure regulations and expectations (including, but not limited to, cybersecurity and environmental, social and governance matters); risks arising from our international activities (including those related to the conflict in Ukraine or fluctuations in foreign currency exchange rates) and those of our vendors; failure to effectively manage our costs; our dependence on cash flows and net earnings generated during the fourth fiscal quarter; pricing investments and promotional activity; economic or regulatory developments that might affect our ability to provide attractive promotional financing; constraints in the capital markets; changes to our vendor credit terms; changes in our credit ratings; failure to meet financial-performance guidance or other forward-looking statements; and general economic uncertainty in key global markets and worsening of global economic conditions or low levels of economic growth. We caution that the foregoing list of important factors is not complete. Any forward-looking statements speak only as of the date they are made and we assume no obligation to update any forward-looking statement that we may make.





 



 

Investor Contact:

 Media Contact:

Mollie O'Brien

   Carly Charlson

mollie.obrien@bestbuy.com

   carly.charlson@bestbuy.com



 



 



 

4

 


 

 

 

 

BEST BUY CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

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

(Unaudited and subject to reclassification)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended



July 29, 2023

 

July 30, 2022

 

July 29, 2023

 

July 30, 2022

Revenue

$

9,583 

 

 

$

10,329 

 

 

$

19,050 

 

 

$

20,976 

 

Cost of sales

 

7,363 

 

 

 

8,042 

 

 

 

14,680 

 

 

 

16,336 

 

Gross profit

 

2,220 

 

 

 

2,287 

 

 

 

4,370 

 

 

 

4,640 

 

Gross profit %

 

23.2 

%

 

 

22.1 

%

 

 

22.9 

%

 

 

22.1 

%

Selling, general and administrative expenses

1,879 

 

 

 

1,882 

 

 

 

3,727 

 

 

 

3,772 

 

SG&A %

 

19.6 

%

 

 

18.2 

%

 

 

19.6 

%

 

 

18.0 

%

Restructuring charges

 

(7)

 

 

 

34 

 

 

 

(16)

 

 

 

35 

 

Operating income

 

348 

 

 

 

371 

 

 

 

659 

 

 

 

833 

 

Operating income %

 

3.6 

%

 

 

3.6 

%

 

 

3.5 

%

 

 

4.0 

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of subsidiary, net

 

21 

 

 

 

 -

 

 

 

21 

 

 

 

 -

 

Investment income (expense) and other

 

12 

 

 

 

 

 

 

33 

 

 

 

(2)

 

Interest expense

 

(12)

 

 

 

(7)

 

 

 

(24)

 

 

 

(13)

 

Earnings before income tax expense and equity in income (loss) of affiliates

369 

 

 

 

367 

 

 

 

689 

 

 

 

818 

 

Income tax expense

 

96 

 

 

 

58 

 

 

 

171 

 

 

 

168 

 

Effective tax rate

 

26.1 

%

 

 

15.6 

%

 

 

24.8 

%

 

 

20.5 

%

Equity in income (loss) of affiliates

 

 

 

 

(3)

 

 

 

 -

 

 

 

(3)

 

Net earnings

$

274 

 

 

$

306 

 

 

$

518 

 

 

$

647 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.25 

 

 

$

1.36 

 

 

$

2.37 

 

 

$

2.86 

 

Diluted earnings per share

$

1.25 

 

 

$

1.35 

 

 

$

2.36 

 

 

$

2.85 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

218.6 

 

 

 

225.4 

 

 

 

218.7 

 

 

 

226.1 

 

Diluted

 

219.0 

 

 

 

226.1 

 

 

 

219.5 

 

 

 

227.2 

 





 

5

 


 

 

 

 

BEST BUY CO., INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

(Unaudited and subject to reclassification)











 

 

 

 

 

 

 



July 29, 2023

 

July 30, 2022

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,093 

 

 

$

840 

 

Receivables, net

 

856 

 

 

 

840 

 

Merchandise inventories

 

5,651 

 

 

 

6,043 

 

Other current assets

 

704 

 

 

 

621 

 

Total current assets

 

8,304 

 

 

 

8,344 

 

Property and equipment, net

 

2,305 

 

 

 

2,319 

 

Operating lease assets

 

2,813 

 

 

 

2,796 

 

Goodwill

 

1,383 

 

 

 

1,385 

 

Other assets

 

513 

 

 

 

575 

 

Total assets

$

15,318 

 

 

$

15,419 

 



 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

5,471 

 

 

$

5,406 

 

Unredeemed gift card liabilities

 

250 

 

 

 

273 

 

Deferred revenue

 

996 

 

 

 

1,133 

 

Accrued compensation and related expenses

 

377 

 

 

 

374 

 

Accrued liabilities

 

709 

 

 

 

820 

 

Current portion of operating lease liabilities

 

615 

 

 

 

629 

 

Current portion of long-term debt

 

15 

 

 

 

15 

 

Total current liabilities

 

8,433 

 

 

 

8,650 

 

Long-term operating lease liabilities

 

2,254 

 

 

 

2,221 

 

Long-term liabilities

 

651 

 

 

 

472 

 

Long-term debt

 

1,145 

 

 

 

1,184 

 

Equity

 

2,835 

 

 

 

2,892 

 

Total liabilities and equity

$

15,318 

 

 

$

15,419 

 

 

6

 


 

 

 

 







BEST BUY CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

(Unaudited and subject to reclassification)







 

 

 

 

 

 

 



Six Months Ended



July 29, 2023

 

July 30, 2022

Operating activities

 

 

 

 

 

 

 

Net earnings

$

518 

 

 

$

647 

 

Adjustments to reconcile net earnings to total cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation and amortization

 

473 

 

 

 

453 

 

Restructuring charges

 

(16)

 

 

 

35 

 

Stock-based compensation

 

75 

 

 

 

65 

 

Gain on sale of subsidiary, net

 

(21)

 

 

 

 -

 

Other, net

 

 

 

 

19 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Receivables

 

289 

 

 

 

201 

 

Merchandise inventories

 

(508)

 

 

 

(79)

 

Other assets

 

(32)

 

 

 

(13)

 

Accounts payable

 

(206)

 

 

 

(1,434)

 

Income taxes

 

(148)

 

 

 

42 

 

Other liabilities

 

(245)

 

 

 

(645)

 

Total cash provided by (used in) operating activities

 

181 

 

 

 

(709)

 



 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Additions to property and equipment

 

(395)

 

 

 

(441)

 

Purchases of investments

 

(2)

 

 

 

(46)

 

Net proceeds from sale of subsidiary

 

14 

 

 

 

 -

 

Other, net

 

 

 

 

 

Total cash used in investing activities

 

(381)

 

 

 

(484)

 



 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Repurchase of common stock

 

(158)

 

 

 

(465)

 

Dividends paid

 

(402)

 

 

 

(397)

 

Other, net

 

 -

 

 

 

 

Total cash used in financing activities

 

(560)

 

 

 

(861)

 



 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(2)

 

 

 

 

Decrease in cash, cash equivalents and restricted cash

 

(762)

 

 

 

(2,053)

 

Cash, cash equivalents and restricted cash at beginning of period

 

2,253 

 

 

 

3,205 

 

Cash, cash equivalents and restricted cash at end of period

$

1,491 

 

 

$

1,152 

 









 

7

 


 

 

 

 

BEST BUY CO., INC.

SEGMENT INFORMATION

($ in millions)

(Unaudited and subject to reclassification)







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

Domestic Segment Results

July 29, 2023

 

July 30, 2022

 

July 29, 2023

 

July 30, 2022

Revenue

$

8,890 

 

 

$

9,569 

 

 

$

17,691 

 

 

$

19,463 

 

Comparable sales % change

 

(6.3)

%

 

 

(12.7)

%

 

 

(8.4)

%

 

 

(10.6)

%

Comparable online sales % change

 

(7.1)

%

 

 

(14.7)

%

 

 

(9.7)

%

 

 

(14.8)

%

Gross profit

$

2,052 

 

 

$

2,109 

 

 

$

4,044 

 

 

$

4,279 

 

Gross profit as a % of revenue

 

23.1 

%

 

 

22.0 

%

 

 

22.9 

%

 

 

22.0 

%

SG&A

$

1,730 

 

 

$

1,732 

 

 

$

3,440 

 

 

$

3,473 

 

SG&A as a % of revenue

 

19.5 

%

 

 

18.1 

%

 

 

19.4 

%

 

 

17.8 

%

Operating income

$

329 

 

 

$

343 

 

 

$

619 

 

 

$

772 

 

Operating income as a % of revenue

 

3.7 

%

 

 

3.6 

%

 

 

3.5 

%

 

 

4.0 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic Segment Non-GAAP Results1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

2,052 

 

 

$

2,109 

 

 

$

4,044 

 

 

$

4,279 

 

Gross profit as a % of revenue

 

23.1 

%

 

 

22.0 

%

 

 

22.9 

%

 

 

22.0 

%

SG&A

$

1,709 

 

 

$

1,710 

 

 

$

3,399 

 

 

$

3,429 

 

SG&A as a % of revenue

 

19.2 

%

 

 

17.9 

%

 

 

19.2 

%

 

 

17.6 

%

Operating income

$

343 

 

 

$

399 

 

 

$

645 

 

 

$

850 

 

Operating income as a % of revenue

 

3.9 

%

 

 

4.2 

%

 

 

3.6 

%

 

 

4.4 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

International Segment Results

July 29, 2023

 

July 30, 2022

 

July 29, 2023

 

July 30, 2022

Revenue

$

693 

 

 

$

760 

 

 

$

1,359 

 

 

$

1,513 

 

Comparable sales % change

 

(5.4)

%

 

 

(4.2)

%

 

 

(5.5)

%

 

 

(2.8)

%

Gross profit

$

168 

 

 

$

178 

 

 

$

326 

 

 

$

361 

 

Gross profit as a % of revenue

 

24.2 

%

 

 

23.4 

%

 

 

24.0 

%

 

 

23.9 

%

SG&A

$

149 

 

 

$

150 

 

 

$

287 

 

 

$

299 

 

SG&A as a % of revenue

 

21.5 

%

 

 

19.7 

%

 

 

21.1 

%

 

 

19.8 

%

Operating income

$

19 

 

 

$

28 

 

 

$

40 

 

 

$

61 

 

Operating income as a % of revenue

 

2.7 

%

 

 

3.7 

%

 

 

2.9 

%

 

 

4.0 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Segment Non-GAAP Results1

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

168 

 

 

$

178 

 

 

$

326 

 

 

$

361 

 

Gross profit as a % of revenue

 

24.2 

%

 

 

23.4 

%

 

 

24.0 

%

 

 

23.9 

%

SG&A

$

149 

 

 

$

150 

 

 

$

287 

 

 

$

299 

 

SG&A as a % of revenue

 

21.5 

%

 

 

19.7 

%

 

 

21.1 

%

 

 

19.8 

%

Operating income

$

19 

 

 

$

28 

 

 

$

39 

 

 

$

62 

 

Operating income as a % of revenue

 

2.7 

%

 

 

3.7 

%

 

 

2.9 

%

 

 

4.1 

%





(1)For GAAP to non-GAAP reconciliations, please refer to the attached supporting schedule titled Reconciliation of Non-GAAP Financial Measures.

 

8

 


 

 

 

 

BEST BUY CO., INC.

REVENUE CATEGORY SUMMARY

(Unaudited and subject to reclassification)









 

 

 

 

 

 

 

 

 

 

 



Revenue Mix

 

Comparable Sales



Three Months Ended

 

Three Months Ended

Domestic Segment

July 29, 2023

 

July 30, 2022

 

July 29, 2023

 

July 30, 2022

Computing and Mobile Phones

41 

%

 

42 

%

 

(6.4)

%

 

(16.6)

%

Consumer Electronics

30 

%

 

30 

%

 

(5.7)

%

 

(14.7)

%

Appliances

16 

%

 

17 

%

 

(16.1)

%

 

(1.2)

%

Entertainment

%

 

%

 

9.0 

%

 

(9.2)

%

Services

%

 

%

 

7.6 

%

 

(8.5)

%

Other

%

 

%

 

2.4 

%

 

15.6 

%

Total

100 

%

 

100 

%

 

(6.3)

%

 

(12.7)

%



 

 

 

 

 

 

 

 

 

 

 



Revenue Mix

 

Comparable Sales



Three Months Ended

 

Three Months Ended

International Segment

July 29, 2023

 

July 30, 2022

 

July 29, 2023

 

July 30, 2022

Computing and Mobile Phones

45 

%

 

43 

%

 

(2.4)

%

 

(7.6)

%

Consumer Electronics

28 

%

 

29 

%

 

(10.4)

%

 

(4.8)

%

Appliances

13 

%

 

14 

%

 

(6.1)

%

 

6.8 

%

Entertainment

%

 

%

 

2.5 

%

 

(5.8)

%

Services

%

 

%

 

4.6 

%

 

(0.4)

%

Other

%

 

%

 

(38.1)

%

 

12.6 

%

Total

100 

%

 

100 

%

 

(5.4)

%

 

(4.2)

%

 

9

 


 

 

 

 

BEST BUY CO., INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

($ in millions, except per share amounts)

(Unaudited and subject to reclassification)



The following information provides reconciliations of the most comparable financial measures presented in accordance with accounting principles generally accepted in the U.S. (GAAP financial measures) to presented non-GAAP financial measures. The company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP financial measures. Generally, presented non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill and intangible asset impairments, price-fixing settlements, gains and losses on subsidiaries and certain investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, the GAAP financial measures presented in this earnings release and the company’s financial statements and other publicly filed reports. Non-GAAP financial measures as presented herein may not be comparable to similarly titled measures used by other companies.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Three Months Ended



July 29, 2023

 

July 30, 2022



Domestic

 

International

 

Consolidated

 

Domestic

 

International

 

Consolidated

SG&A

$

1,730 

 

 

$

149 

 

 

$

1,879 

 

 

$

1,732 

 

 

$

150 

 

 

$

1,882 

 

% of revenue

 

19.5 

%

 

 

21.5 

%

 

 

19.6 

%

 

 

18.1 

%

 

 

19.7 

%

 

 

18.2 

%

Intangible asset amortization1

 

(21)

 

 

 

 -

 

 

 

(21)

 

 

 

(22)

 

 

 

 -

 

 

 

(22)

 

Non-GAAP SG&A

$

1,709 

 

 

$

149 

 

 

$

1,858 

 

 

$

1,710 

 

 

$

150 

 

 

$

1,860 

 

% of revenue

 

19.2 

%

 

 

21.5 

%

 

 

19.4 

%

 

 

17.9 

%

 

 

19.7 

%

 

 

18.0 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

329 

 

 

$

19 

 

 

$

348 

 

 

$

343 

 

 

$

28 

 

 

$

371 

 

% of revenue

 

3.7 

%

 

 

2.7 

%

 

 

3.6 

%

 

 

3.6 

%

 

 

3.7 

%

 

 

3.6 

%

Intangible asset amortization1

 

21 

 

 

 

 -

 

 

 

21 

 

 

 

22 

 

 

 

 -

 

 

 

22 

 

Restructuring charges2

 

(7)

 

 

 

 -

 

 

 

(7)

 

 

 

34 

 

 

 

 -

 

 

 

34 

 

Non-GAAP operating income

$

343 

 

 

$

19 

 

 

$

362 

 

 

$

399 

 

 

$

28 

 

 

$

427 

 

% of revenue

 

3.9 

%

 

 

2.7 

%

 

 

3.8 

%

 

 

4.2 

%

 

 

3.7 

%

 

 

4.1 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

 

 

 

 

 

 

 

26.1 

%

 

 

 

 

 

 

 

 

 

 

15.6 

%

Intangible asset amortization1

 

 

 

 

 

 

 

 

 

(0.4)

%

 

 

 

 

 

 

 

 

 

 

0.4 

%

Restructuring charges2

 

 

 

 

 

 

 

 

 

0.4 

%

 

 

 

 

 

 

 

 

 

 

0.7 

%

Loss on investments

 

 

 

 

 

 

 

 

 

0.5 

%

 

 

 

 

 

 

 

 

 

 

 -

%

Non-GAAP effective tax rate

 

 

 

 

 

 

 

 

 

26.6 

%

 

 

 

 

 

 

 

 

 

 

16.7 

%









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Three Months Ended



July 29, 2023

 

July 30, 2022



Pretax Earnings

 

Net of Tax4

 

Per Share

 

Pretax Earnings

 

Net of Tax4

 

Per Share

Diluted EPS

 

 

 

 

 

 

 

 

$

1.25 

 

 

 

 

 

 

 

 

 

 

$

1.35 

 

Intangible asset amortization1