BEST BUY CO INC [BBY] Filings

10-Q 1 bby-20211030x10q.htm 10-Q bby-20211030x10q

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 30, 2021


	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

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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 240,560,898 shares of common stock outstanding as of December 1, 2021.

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Table of Contents

BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED OCTOBER 30, 2021

TABLE OF CONTENTS


Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of October 30, 2021, January 30, 2021, and October 31, 2020		3
	b)	Condensed Consolidated Statements of Earnings for the three and nine months ended October 30, 2021, and October 31, 2020		4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 30, 2021, and October 31, 2020		5
	d)	Condensed Consolidated Statements of Cash Flows for the nine months ended October 30, 2021, and October 31, 2020		6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended October 30, 2021, and October 31, 2020		7
	f)	Notes to Condensed Consolidated Financial Statements		8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.		Controls and Procedures		25
Part II — Other Information				25
Item 1.		Legal Proceedings		25
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6.		Exhibits		26
Signatures			27

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Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)


	October 30, 2021		January 30, 2021		October 31, 2020
Assets
Current assets
Cash and cash equivalents	$	3,465	$	5,494	$	5,136
Short-term investments		-		-		545
Receivables, net		1,016		1,061		1,028
Merchandise inventories		8,553		5,612		7,459
Other current assets		486		373		383
Total current assets		13,520		12,540		14,551
Property and equipment, net		2,256		2,260		2,265
Operating lease assets		2,688		2,612		2,692
Goodwill		986		986		986
Other assets		652		669		708
Total assets	$	20,102	$	19,067	$	21,202

Liabilities and equity
Current liabilities
Accounts payable	$	8,405	$	6,979	$	9,110
Unredeemed gift card liabilities		306		317		278
Deferred revenue		977		711		788
Accrued compensation and related expenses		703		725		446
Accrued liabilities		895		972		968
Short-term debt		-		110		-
Current portion of operating lease liabilities		645		693		685
Current portion of long-term debt		15		14		670
Total current liabilities		11,946		10,521		12,945
Long-term operating lease liabilities		2,102		2,012		2,117
Long-term debt		1,223		1,253		1,256
Long-term liabilities		553		694		798
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 - 243.8 million, 256.9 million and 258.8 million shares, respectively		24		26		26
Additional paid-in capital		-		-		133
Retained earnings		3,917		4,233		3,659
Accumulated other comprehensive income		337		328		268
Total equity		4,278		4,587		4,086
Total liabilities and equity	$	20,102	$	19,067	$	21,202

NOTE: The Consolidated Balance Sheet as of January 30, 2021, has been condensed from the audited consolidated financial statements.

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

Condensed Consolidated Statements of Earnings

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



	Three Months Ended				Nine Months Ended
	October 30, 2021		October 31, 2020		October 30, 2021		October 31, 2020
Revenue	$	11,910	$	11,853	$	35,396	$	30,325
Cost of sales		9,108		9,058		27,069		23,295
Gross profit		2,802		2,795		8,327		7,030
Selling, general and administrative expenses		2,133		2,123		6,130		5,560
Restructuring charges		(1)		111		(39)		112
Operating income		670		561		2,236		1,358
Other income (expense):
Investment income and other		1		5		7		19
Interest expense		(7)		(11)		(19)		(43)
Earnings before income tax expense and equity in income of affiliates		664		555		2,224		1,334
Income tax expense		166		164		402		352
Equity in income of affiliates		1		-		6		-
Net earnings	$	499	$	391	$	1,828	$	982

Basic earnings per share	$	2.02	$	1.50	$	7.31	$	3.79
Diluted earnings per share	$	2.00	$	1.48	$	7.23	$	3.74

Weighted-average common shares outstanding:
Basic		246.4		259.8		249.9		259.3
Diluted		249.1		263.7		252.9		262.5

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)



	Three Months Ended				Nine Months Ended
	October 30, 2021		October 31, 2020		October 30, 2021		October 31, 2020
Net earnings	$	499	$	391	$	1,828	$	982
Foreign currency translation adjustments, net of tax		2		10		9		(25)
Cash flow hedges		-		2		-		(2)
Comprehensive income	$	501	$	403	$	1,837	$	955

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	Nine Months Ended
	October 30, 2021		October 31, 2020
Operating activities
Net earnings	$	1,828	$	982
Adjustments to reconcile net earnings to total cash provided by operating activities:
Depreciation and amortization		644		628
Restructuring charges		(39)		112
Stock-based compensation		105		107
Deferred income taxes		(16)		19
Other, net		3		10
Changes in operating assets and liabilities:
Receivables		43		106
Merchandise inventories		(2,924)		(2,300)
Other assets		(12)		(60)
Accounts payable		1,387		3,824
Income taxes		(172)		121
Other liabilities		214		358
Total cash provided by operating activities		1,061		3,907

Investing activities
Additions to property and equipment		(548)		(534)
Purchases of investments		(221)		(620)
Sales of investments		64		-
Other, net		(2)

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10-Q	[2020-08-31]
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10-K	[2020-03-23]
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10-K	[2019-03-28]
10-Q	[2018-12-07]
10-Q	[2018-09-10]
10-Q	[2018-06-08]
10-K	[2018-04-02]
10-Q	[2017-12-01]
10-Q	[2017-09-05]
10-Q	[2017-06-05]
10-K	[2017-03-24]
10-Q	[2016-12-02]
10-Q	[2016-09-02]
10-Q	[2016-06-09]
10-K	[2016-03-23]
10-Q	[2015-12-04]
10-Q	[2015-09-04]
10-Q	[2015-06-08]
10-K	[2015-03-31]
10-Q	[2014-12-05]
10-Q	[2014-09-10]
10-Q	[2014-06-09]
10-K	[2014-03-28]
10-Q	[2013-12-09]
10-Q	[2013-09-09]
10-Q	[2013-06-07]
10-Q	[2012-12-05]
10-Q	[2012-09-06]
10-Q	[2012-06-13]
10-K	[2012-05-01]
10-Q	[2012-01-03]