bby-20221029x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 29, 2022


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-9595

BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)


Minnesota		41-0907483
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7601 Penn Avenue South
Richfield, Minnesota		55423
(Address of principal executive offices)		(Zip Code)

(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:



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: (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.


Large Accelerated Filer 	Accelerated Filer 		Non-accelerated Filer 

Smaller Reporting Company 		Emerging Growth Company 

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 221,264,454 shares of common stock outstanding as of December 2, 2022.

‎

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)


	October 29, 2022		January 29, 2022		October 30, 2021
Assets
Current assets
Cash and cash equivalents	$	932	$	2,936	$	3,465
Receivables, net		1,050		1,042		1,016
Merchandise inventories		7,294		5,965		8,553
Other current assets		646		596		486
Total current assets		9,922		10,539		13,520
Property and equipment, net		2,373		2,250		2,256
Operating lease assets		2,799		2,654		2,688
Goodwill		1,383		1,384		986
Other assets		544		677		652
Total assets	$	17,021	$	17,504	$	20,102

Liabilities and equity
Current liabilities
Accounts payable	$	7,056	$	6,803	$	8,405
Unredeemed gift card liabilities		273		316		306
Deferred revenue		1,080		1,103		977
Accrued compensation and related expenses		363		845		703
Accrued liabilities		744		946		895
Current portion of operating lease liabilities		638		648		645
Current portion of long-term debt		16		13		15
Total current liabilities		10,170		10,674		11,946
Long-term operating lease liabilities		2,216		2,061		2,102
Long-term debt		1,142		1,216		1,223
Long-term liabilities		500		533		553
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 - 225.2 million, 227.4 million and 243.8 million shares, respectively		22		23		24
Additional paid-in capital		61		-		-
Retained earnings		2,597		2,668		3,917
Accumulated other comprehensive income		313		329		337
Total equity		2,993		3,020		4,278
Total liabilities and equity	$	17,021	$	17,504	$	20,102

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				Nine Months Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Revenue	$	10,587	$	11,910	$	31,563	$	35,396
Cost of sales		8,255		9,108		24,591		27,069
Gross profit		2,332		2,802		6,972		8,327
Selling, general and administrative expenses		1,941		2,133		5,713		6,130
Restructuring charges		26		(1)		61		(39)
Operating income		365		670		1,198		2,236
Other income (expense):
Investment income and other		4		1		2		7
Interest expense		(10)		(7)		(23)		(19)
Earnings before income tax expense and equity in income (loss) of affiliates		359		664		1,177		2,224
Income tax expense		84		166		252		402
Equity in income (loss) of affiliates		2		1		(1)		6
Net earnings	$	277	$	499	$	924	$	1,828

Basic earnings per share	$	1.23	$	2.02	$	4.09	$	7.31
Diluted earnings per share	$	1.22	$	2.00	$	4.07	$	7.23

Weighted-average common shares outstanding:
Basic		225.5		246.4		225.9		249.9
Diluted		226.2		249.1		226.9		252.9

See Notes to Condensed Consolidated Financial Statements.

‎

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	Nine Months Ended
	October 29, 2022		October 30, 2021
Operating activities
Net earnings	$	924	$	1,828
Adjustments to reconcile net earnings to total cash provided by (used in) operating activities:
Depreciation and amortization		679		644
Restructuring charges		61		(39)
Stock-based compensation		98		105
Deferred income taxes		10		(16)
Other, net		9		3
Changes in operating assets and liabilities, net of acquired assets and liabilities:
Receivables		(14)		43
Merchandise inventories		(1,365)		(2,924)
Other assets		(1)		(12)
Accounts payable		224		1,387
Income taxes		28		(172)
Other liabilities		(761)		214
Total cash provided by (used in) operating activities		(108)		1,061

Investing activities
Additions to property and equipment		(696)		(548)
Purchases of investments		(46)		(221)
Sales of investments		5		64
Other, net		1		(2)
Total cash used in investing activities		(736)		(707)

Financing activities
Repurchase of common stock		(465)		(1,728)
Issuance of common stock		15		28
Dividends paid		(595)		(522)
Repayments of debt		(13)		(123)
Other, net		-		(2)
Total cash used in financing activities		(1,058)		(2,347)

Effect of exchange rate changes on cash and cash equivalents		(10)		6
Decrease in cash, cash equivalents and restricted cash		(1,912)


Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of October 29, 2022, January 29, 2022, and October 30, 2021		3
	b)	Condensed Consolidated Statements of Earnings for the three and nine months ended October 29, 2022, and October 30, 2021		4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 29, 2022, and October 30, 2021		5
	d)	Condensed Consolidated Statements of Cash Flows for the nine months ended October 29, 2022, and October 30, 2021		6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended October 29, 2022, and October 30, 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		23
Part II — Other Information				24
Item 1.		Legal Proceedings		24
Item 6.		Exhibits		24
Signatures			25