bby-20230729x10q

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 July 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 217,638,155 shares of common stock outstanding as of August 30, 2023.

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BEST BUY CO., INC.

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

TABLE OF CONTENTS


Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of July 29, 2023, January 28, 2023, and July 30, 2022		3
	b)	Condensed Consolidated Statements of Earnings for the three and six months ended July 29, 2023, and July 30, 2022		4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 29, 2023, and July 30, 2022		5
	d)	Condensed Consolidated Statements of Cash Flows for the six months ended July 29, 2023, and July 30, 2022		6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended July 29, 2023, and July 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		24
Item 4.		Controls and Procedures		24
Part II — Other Information				24
Item 1.		Legal Proceedings		24
Item 2.		Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities		25
Item 5.		Other Information		25
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.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)


	July 29, 2023		January 28, 2023		July 30, 2022
Assets
Current assets
Cash and cash equivalents	$	1,093	$	1,874	$	840
Receivables, net		856		1,141		840
Merchandise inventories		5,651		5,140		6,043
Other current assets		704		647		621
Total current assets		8,304		8,802		8,344
Property and equipment, net		2,305		2,352		2,319
Operating lease assets		2,813		2,746		2,796
Goodwill		1,383		1,383		1,385
Other assets		513		520		575
Total assets	$	15,318	$	15,803	$	15,419

Liabilities and equity
Current liabilities
Accounts payable	$	5,471	$	5,687	$	5,406
Unredeemed gift card liabilities		250		274		273
Deferred revenue		996		1,116		1,133
Accrued compensation and related expenses		377		405		374
Accrued liabilities		709		843		820
Current portion of operating lease liabilities		615		638		629
Current portion of long-term debt		15		16		15
Total current liabilities		8,433		8,979		8,650
Long-term operating lease liabilities		2,254		2,164		2,221
Long-term debt		1,145		1,160		1,184
Long-term liabilities		651		705		472
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 - 217.9 million, 218.1 million and 225.1 million shares, respectively		22		22		22
Additional paid-in capital		-		21		20
Retained earnings		2,491		2,430		2,522
Accumulated other comprehensive income		322		322		328
Total equity		2,835		2,795		2,892
Total liabilities and equity	$	15,318	$	15,803	$	15,419

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.

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Condensed Consolidated Statements of Earnings

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


	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
Selling, general and administrative expenses		1,879		1,882		3,727		3,772
Restructuring charges		(7)		34		(16)		35
Operating income		348		371		659		833
Other income (expense):
Gain on sale of subsidiary, net		21		-		21		-
Investment income (expense) and other		12		3		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
Equity in income (loss) of affiliates		1		(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

See Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	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		2		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		2		3
Total cash used in investing activities		(381)		(484)

Financing activities
Repurchase of common stock		(158)		(465)
Dividends paid		(402)		(397)
Other, net		-		1
Total cash used in financing activities		(560)		(861)

Effect of exchange rate changes on cash and cash equivalents		(2)		1
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

See Notes to Condensed Consolidated Financial Statements.

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