bby-20230429x10q

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 April 29, 2023


	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 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


Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of April 29, 2023, January 28, 2023, and April 30, 2022		3
	b)	Condensed Consolidated Statements of Earnings for the three months ended April 29, 2023, and April 30, 2022		4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three months ended April 29, 2023, and April 30, 2022		5
	d)	Condensed Consolidated Statements of Cash Flows for the three months ended April 29, 2023, and April 30, 2022		6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended April 29, 2023, and April 30, 2022		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

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)


	April 29, 2023		January 28, 2023		April 30, 2022
Assets
Current assets
Cash and cash equivalents	$	1,030	$	1,874	$	640
Receivables, net		860		1,141		804
Merchandise inventories		5,219		5,140		6,258
Other current assets		653		647		613
Total current assets		7,762		8,802		8,315
Property and equipment, net		2,321		2,352		2,251
Operating lease assets		2,694		2,746		2,704
Goodwill		1,383		1,383		1,385
Other assets		528		520		596
Total assets	$	14,688	$	15,803	$	15,251

Liabilities and equity
Current liabilities
Accounts payable	$	4,874	$	5,687	$	5,492
Unredeemed gift card liabilities		256		274		284
Deferred revenue		1,015		1,116		1,101
Accrued compensation and related expenses		364		405		336
Accrued liabilities		759		843		771
Current portion of operating lease liabilities		625		638		636
Current portion of long-term debt		15		16		15
Total current liabilities		7,908		8,979		8,635
Long-term operating lease liabilities		2,128		2,164		2,121
Long-term debt		1,155		1,160		1,170
Long-term liabilities		704		705		558
Contingencies (Note 10)
Equity
Best Buy Co., Inc. Shareholders' 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 - 218.5 million, 218.1 million and 224.6 million shares, respectively		22		22		22
Additional paid-in capital		-		21		-
Retained earnings		2,454		2,430		2,417
Accumulated other comprehensive income		317		322		328
Total equity		2,793		2,795		2,767
Total liabilities and equity	$	14,688	$	15,803	$	15,251

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)


	Three Months Ended
	April 29, 2023		April 30, 2022
Revenue	$	9,467	$	10,647
Cost of sales		7,317		8,294
Gross profit		2,150		2,353
Selling, general and administrative expenses		1,848		1,890
Restructuring charges		(9)		1
Operating income		311		462
Other income (expense):
Investment income (expense) and other		21		(5)
Interest expense		(12)		(6)
Earnings before income tax expense and equity in loss of affiliates		320		451
Income tax expense		75		110
Equity in loss of affiliates		(1)		-
Net earnings	$	244	$	341

Basic earnings per share	$	1.11	$	1.50
Diluted earnings per share	$	1.11	$	1.49

Weighted-average common shares outstanding:
Basic		218.9		226.8
Diluted		219.9		228.4

See Notes to Condensed Consolidated Financial Statements.

‎

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	Three Months Ended
	April 29, 2023		April 30, 2022
Operating activities
Net earnings	$	244	$	341
Adjustments to reconcile net earnings to total cash used in operating activities:
Depreciation and amortization		237		224
Restructuring charges		(9)		1
Stock-based compensation		38		39
Other, net		14		12
Changes in operating assets and liabilities:
Receivables		279		238
Merchandise inventories		(86)		(297)
Other assets		(17)		4
Accounts payable		(790)		(1,296)
Income taxes		46		63
Other liabilities		(287)		(713)
Total cash used in operating activities		(331)		(1,384)

Investing activities
Additions to property and equipment		(204)		(215)
Other, net		-		2
Total cash used in investing activities		(204)		(213)

Financing activities
Repurchase of common stock		(79)		(455)
Dividends paid		(202)		(199)
Other, net		-		4
Total cash used in financing activities		(281)		(650)

Effect of exchange rate changes on cash and cash equivalents		(5)		2
Decrease in cash, cash equivalents and restricted cash		(821)		(2,245)
Cash, cash equivalents and restricted cash at beginning of period		2,253		3,205
Cash, cash equivalents and restricted cash at end of period	$	1,432	$	960

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 January 28, 2023		218.1	$	22	$	21	$	2,430	$	322	$	2,795
Net earnings, three months ended April 29, 2023		-		-		-		244		-		244
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		-		-		-		-		(5)		(5)
Stock-based compensation		-		-		38		-		-		38
Issuance of common stock		1.5		-		4		-		-		4
Common stock dividends, $0.92 per share		-		-		4		(206)		-		(202)
Repurchase of common stock		(1.1)		-		(67)		(14)		-		(81)
Balances at April 29, 2023		218.5	$	22	$	-	$	2,454	$	317	$	2,793

Balances at January 29, 2022		227.4	$	23	$	-	$	2,668	$	329	$	3,020
Net earnings, three months ended April 30, 2022		-		-