Quarterly Report (10-q)
September 08 2022 - 04:44PM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
July 30, 2022
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
Commission File Number:
1-9595
BEST BUY CO., INC.
(Exact name of registrant as specified in its charter)
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Minnesota
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41-0907483
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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7601 Penn Avenue South
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Richfield,
Minnesota
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55423
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(Address of principal executive offices)
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(Zip Code)
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(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:
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Title of each class
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Trading Symbol
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Name of exchange on which registered
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Common Stock, $0.10 par value per share
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BBY
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New York Stock Exchange
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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.
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Large Accelerated Filer
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Accelerated Filer
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Non-accelerated Filer
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Smaller Reporting Company
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Emerging Growth Company
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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
225,130,807
shares of common stock outstanding as of September 6,
2022.
BEST BUY CO., INC.
FORM 10-Q FOR THE QUARTER ENDED JULY 30, 2022
TABLE OF CONTENTS
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Part I — Financial Information
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3
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Item 1.
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Financial Statements
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3
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a)
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Condensed Consolidated Balance Sheets as of July 30, 2022, January
29, 2022, and July 31, 2021
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3
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b)
|
Condensed Consolidated Statements of Earnings for the three and six
months ended July 30, 2022, and
July 31, 2021
|
4
|
|
|
c)
|
Condensed Consolidated Statements of Comprehensive Income for the
three and six months ended July 30, 2022, and July
31, 2021
|
5
|
|
|
d)
|
Condensed Consolidated Statements of Cash Flows for the six months
ended July 30, 2022, and July 31, 2021
|
6
|
|
|
e)
|
Condensed Consolidated Statements of Changes in Shareholders'
Equity for the three and six months ended July 30, 2022,
and July 31, 2021
|
7
|
|
|
f)
|
Notes to Condensed Consolidated Financial Statements
|
8
|
|
Item 2.
|
|
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
14
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures About Market
Risk
|
23
|
|
Item 4.
|
|
Controls and Procedures
|
24
|
|
Part II — Other Information
|
24
|
|
Item 1.
|
|
Legal Proceedings
|
24
|
|
Item 2.
|
|
Unregistered Sales of Equity Securities and Use of
Proceeds
|
24
|
|
Item 6.
|
|
Exhibits
|
25
|
|
Signatures
|
26
|
PART I — FINANCIAL
INFORMATION
Item 1. Financial Statements
Condensed
Consolidated
Balance Sheets
$ in millions, except per share amounts (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 30, 2022
|
|
January 29, 2022
|
|
July 31, 2021
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
840
|
|
|
$
|
2,936
|
|
|
$
|
4,340
|
|
|
Receivables, net
|
|
840
|
|
|
|
1,042
|
|
|
|
883
|
|
|
Merchandise inventories
|
|
6,043
|
|
|
|
5,965
|
|
|
|
6,417
|
|
|
Other current assets
|
|
621
|
|
|
|
596
|
|
|
|
400
|
|
|
Total current assets
|
|
8,344
|
|
|
|
10,539
|
|
|
|
12,040
|
|
|
Property and equipment, net
|
|
2,319
|
|
|
|
2,250
|
|
|
|
2,226
|
|
|
Operating lease assets
|
|
2,796
|
|
|
|
2,654
|
|
|
|
2,670
|
|
|
Goodwill
|
|
1,385
|
|
|
|
1,384
|
|
|
|
986
|
|
|
Other assets
|
|
575
|
|
|
|
677
|
|
|
|
657
|
|
|
Total assets
|
$
|
15,419
|
|
|
$
|
17,504
|
|
|
$
|
18,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
5,406
|
|
|
$
|
6,803
|
|
|
$
|
6,946
|
|
|
Unredeemed gift card liabilities
|
|
273
|
|
|
|
316
|
|
|
|
293
|
|
|
Deferred revenue
|
|
1,133
|
|
|
|
1,103
|
|
|
|
854
|
|
|
Accrued compensation and related expenses
|
|
374
|
|
|
|
845
|
|
|
|
605
|
|
|
Accrued liabilities
|
|
820
|
|
|
|
946
|
|
|
|
892
|
|
|
Short-term debt
|
|
-
|
|
|
|
-
|
|
|
|
110
|
|
|
Current portion of operating lease liabilities
|
|
629
|
|
|
|
648
|
|
|
|
643
|
|
|
Current portion of long-term debt
|
|
15
|
|
|
|
13
|
|
|
|
14
|
|
|
Total current liabilities
|
|
8,650
|
|
|
|
10,674
|
|
|
|
10,357
|
|
|
Long-term operating lease liabilities
|
|
2,221
|
|
|
|
2,061
|
|
|
|
2,090
|
|
|
Long-term debt
|
|
1,184
|
|
|
|
1,216
|
|
|
|
1,243
|
|
|
Long-term liabilities
|
|
472
|
|
|
|
533
|
|
|
|
554
|
|
|
Contingencies (Note 11)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00
par value: Authorized -
400,000
shares; Issued and outstanding -
none
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $0.10
par value: Authorized -
1.0
billion shares; Issued and outstanding -
225.1
million,
227.4
million and
247.3
million shares, respectively
|
|
22
|
|
|
|
23
|
|
|
|
25
|
|
|
Additional paid-in capital
|
|
20
|
|
|
|
-
|
|
|
|
-
|
|
|
Retained earnings
|
|
2,522
|
|
|
|
2,668
|
|
|
|
3,975
|
|
|
Accumulated other comprehensive income
|
|
328
|
|
|
|
329
|
|
|
|
335
|
|
|
Total equity
|
|
2,892
|
|
|
|
3,020
|
|
|
|
4,335
|
|
|
Total liabilities and equity
|
$
|
15,419
|
|
|
$
|
17,504
|
|
|
$
|
18,579
|
|
NOTE: The Consolidated Balance Sheet as of January 29, 2022,
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
July 30, 2022
|
|
July 31, 2021
|
|
July 30, 2022
|
|
July 31, 2021
|
|
Revenue
|
$
|
10,329
|
|
|
$
|
11,849
|
|
|
$
|
20,976
|
|
|
$
|
23,486
|
|
|
Cost of sales
|
|
8,042
|
|
|
|
9,039
|
|
|
|
16,336
|
|
|
|
17,961
|
|
|
Gross profit
|
|
2,287
|
|
|
|
2,810
|
|
|
|
4,640
|
|
|
|
5,525
|
|
|
Selling, general and administrative expenses
|
|
1,882
|
|
|
|
2,009
|
|
|
|
3,772
|
|
|
|
3,997
|
|
|
Restructuring charges
|
|
34
|
|
|
|
4
|
|
|
|
35
|
|
|
|
(38)
|
|
|
Operating income
|
|
371
|
|
|
|
797
|
|
|
|
833
|
|
|
|
1,566
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income (loss) and other
|
|
3
|
|
|
|
3
|
|
|
|
(2)
|
|
|
|
6
|
|
|
Interest expense
|
|
(7)
|
|
|
|
(6)
|
|
|
|
(13)
|
|
|
|
(12)
|
|
|
Earnings before income tax expense and equity in income (loss) of
affiliates
|
|
367
|
|
|
|
794
|
|
|
|
818
|
|
|
|
1,560
|
|
|
Income tax expense
|
|
58
|
|
|
|
64
|
|
|
|
168
|
|
|
|
236
|
|
|
Equity in income (loss) of affiliates
|
|
(3)
|
|
|
|
4
|
|
|
|
(3)
|
|
|
|
5
|
|
|
Net earnings
|
$
|
306
|
|
|
$
|
734
|
|
|
$
|
647
|
|
|
$
|
1,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
$
|
1.36
|
|
|
$
|
2.93
|
|
|
$
|
2.86
|
|
|
$
|
5.28
|
|
|
Diluted earnings per share
|
$
|
1.35
|
|
|
$
|
2.90
|
|
|
$
|
2.85
|
|
|
$
|
5.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
225.4
|
|
|
|
250.2
|
|
|
|
226.1
|
|
|
|
251.7
|
|
|
Diluted
|
|
226.1
|
|
|
|
252.8
|
|
|
|
227.2
|
|
|
|
254.7
|
|
See Notes to Condensed Consolidated Financial
Statements.
Condensed Consolidated Statements of Comprehensive
Income
$ in millions (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
July 30, 2022
|
|
July 31, 2021
|
|
July 30, 2022
|
|
July 31, 2021
|
|
Net earnings
|
$
|
306
|
|
|
$
|
734
|
|
|
$
|
647
|
|
|
$
|
1,329
|
|
|
Foreign currency translation adjustments, net of tax
|
|
-
|
|
|
|
(3)
|
|
|
|
(1)
|
|
|
|
7
|
|
|
Comprehensive income
|
$
|
306
|
|
|
$
|
731
|
|
|
$
|
646
|
|
|
$
|
1,336
|
|
See Notes to Condensed Consolidated Financial
Statements.
Condensed
Consolidated Statements of Cash Flows
$ in millions (unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
July 30, 2022
|
|
July 31, 2021
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
647
|
|
|
$
|
1,329
|
|
|
Adjustments to reconcile net earnings to total cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
453
|
|
|
|
430
|
|
|
Restructuring charges
|
|
35
|
|
|
|
(38)
|
|
|
Stock-based compensation
|
|
65
|
|
|
|
71
|
|
|
Other, net
|
|
19
|
|
|
|
2
|
|
|
Changes in operating assets and liabilities, net of acquired assets
and liabilities:
|
|
|
|
|
|
|
Receivables
|
|
201
|
|
|
|
175
|
|
|
Merchandise inventories
|
|
(79)
|
|
|
|
(794)
|
|
|
Other assets
|
|
(13)
|
|
|
|
(19)
|
|
|
Accounts payable
|
|
(1,434)
|
|
|
|
(58)
|
|
|
Income taxes
|
|
42
|
|
|
|
(162)
|
|
|
Other liabilities
|
|
(645)
|
|
|
|
(72)
|
|
|
Total cash provided by (used in) operating activities
|
|
(709)
|
|
|
|
864
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Additions to property and equipment
|
|
(441)
|
|
|
|
(323)
|
|
|
Purchases of investments
|
|
(46)
|
|
|
|
(93)
|
|
|
Sales of investments
|
|
2
|
|
|
|
60
|
|
|
Other, net
|
|
1
|
|
|
|
(2)
|
|
|
Total cash used in investing activities
|
|
(484)
|
|
|
|
(358)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Repurchase of common stock
|
|
(465)
|
|
|
|
(1,323)
|
|
|
Dividends paid
|
|
(397)
|
|
|
|
(350)
|
|
|
Other, net
|
|
1
|
|
|
|
11
|
|
|
Total cash used in financing activities
|
|
(861)
|
|
|
|
(1,662)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
1
|
|
|
|
5
|
|
|
Decrease in cash, cash equivalents and restricted cash
|
|
(2,053)
|
|
|
|
(1,151)
|
|
|
Cash, cash equivalents and restricted cash at beginning of
period
|
|
3,205
|
|
|
|
5,625
|
|
|
Cash, cash equivalents and restricted cash at end of
period
|
$
|
1,152
|
|
|
$
|
4,474
|
|
See Notes to Condensed Consolidated Financial
Statements.
Condensed Consolidated Statements of Changes in Shareholders'
Equity
$ and shares in millions, except per share
amounts (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|
Balances at April 30, 2022
|
|
224.6
|
|
|
$
|
22
|
|
|
$
|
-
|
|
|
$
|
2,417
|
|
|
$
|
328
|
|
|
$
|
2,767
|
|
|
Net earnings, three months ended July 30, 2022
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
306
|
|
|
|
-
|
|
|
|
306
|
|
|
Stock-based compensation
|
|
-
|
|
|
|
-
|
|
|
|
26
|
|
|
|
-
|
|
|
|
-
|
|
|
|
26
|
|
|
Issuance of common stock
|
|
0.6
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
Common stock dividends, $0.88
per share
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
(201)
|
|
|
|
-
|
|
|
|
(198)
|
|
|
Repurchase of common stock
|
|
(0.1)
|
|
|
|
-
|
|
|
|
(10)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10)
|
|
|
Balances at July 30, 2022
|
|
225.1
|
|
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
2,522
|
|
|
$
|
328
|
|
|
$
|
2,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at January 29, 2022
|
|
227.4
|
|
|
$
|
23
|
|
|
$
|
-
|
|
|
$
|
2,668
|
|
|
$
|
329
|
|
|
$
|
3,020
|
|
|
Net earnings, six months ended July 30, 2022
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
647
|
|
|
|
-
|
|
|
|
647
|
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of tax
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1)
|
|
|
|
(1)
|
|
|
Stock-based compensation
|
|
-
|
|
|
|
-
|
|
|
|
65
|
|
|
|
-
|
|
|
|
-
|
|
|
|
65
|
|
|
Issuance of common stock
|
|
2.3
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
Common stock dividends, $1.76
per share
|
|
-
|
|
|
|
-
|
|
|
|
7
|
|
|
|
(404)
|
|
|
|
-
|
|
|
|
(397)
|
|
|
Repurchase of common stock
|
|
(4.6)
|
|
|
|
(1)
|
|
|
|
(62)
|
|
|
|
(389)
|
|
|
|
-
|
|
|
|
(452)
|
|
|
Balances at July 30, 2022
|
|
225.1
|
|
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
2,522
|
|
|
$
|
328
|
|
|
$
|
2,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at May 1, 2021
|
|
250.4
|
|
|
$
|
25
|
|
|
$
|
33
|
|
|
$
|
3,762
|
|
|
$
|
338
|
|
|
$
|
4,158
|
|
|
Net earnings, three months ended July 31, 2021
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
734
|
|
|
|
-
|
|
|
|
734
|
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of tax
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3)
|
|
|
|
(3)
|
|
|
Stock-based compensation
|
|
-
|
|
|
|
-
|
|
|
|
34
|
|
|
|
-
|
|
|
|
-
|
|
|
</ |