10-Q 1 bby-20220430x10q.htm 10-Q bby-20220430x10q
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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 30, 2022

OR

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

 Image - Image1.jpeg

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 225,168,407 shares of common stock outstanding as of May 31, 2022. 


BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 2022

TABLE OF CONTENTS

Part I — Financial Information

3

Item 1.

Financial Statements

3

a)

Condensed Consolidated Balance Sheets as of April 30, 2022, January 29, 2022, and May 1, 2021

3

b)

Condensed Consolidated Statements of Earnings for the three months ended April 30, 2022, and May 1, 2021

4

c)

Condensed Consolidated Statements of Comprehensive Income for the three months ended April 30, 2022, and May 1, 2021

5

d)

Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2022, and May 1, 2021

6

e)

Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended April 30, 2022, and May 1, 2021

7

f)

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

23

Part II — Other Information

23

Item 1.

Legal Proceedings

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 6.

Exhibits

24

Signatures

25

 

PART I — FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)

April 30, 2022

January 29, 2022

May 1, 2021

Assets

Current assets

Cash and cash equivalents

$

640 

$

2,936 

$

4,278 

Short-term investments

-

-

60 

Receivables, net

804 

1,042 

850 

Merchandise inventories

6,258 

5,965 

5,721 

Other current assets

613 

596 

359 

Total current assets

8,315 

10,539 

11,268 

Property and equipment, net

2,251 

2,250 

2,233 

Operating lease assets

2,704 

2,654 

2,563 

Goodwill

1,385 

1,384 

986 

Other assets

596 

677 

655 

Total assets

$

15,251 

$

17,504 

$

17,705 

Liabilities and equity

Current liabilities

Accounts payable

$

5,492 

$

6,803 

$

6,360 

Unredeemed gift card liabilities

284 

316 

297 

Deferred revenue

1,101 

1,103 

734 

Accrued compensation and related expenses

336 

845 

493 

Accrued liabilities

771 

946 

978 

Short-term debt

-

-

110 

Current portion of operating lease liabilities

636 

648 

654 

Current portion of long-term debt

15 

13 

15 

Total current liabilities

8,635 

10,674 

9,641 

Long-term operating lease liabilities

2,121 

2,061 

1,983 

Long-term debt

1,170 

1,216 

1,229 

Long-term liabilities

558 

533 

694 

Contingencies (Note 10)

 

 

 

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 - 224.6 million, 227.4 million and 250.4 million shares, respectively

22 

23 

25 

Additional paid-in capital

-

-

33 

Retained earnings

2,417 

2,668 

3,762 

Accumulated other comprehensive income

328 

329 

338 

Total equity

2,767 

3,020 

4,158 

Total liabilities and equity

$

15,251 

$

17,504 

$

17,705 

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

April 30, 2022

May 1, 2021

Revenue

$

10,647 

$

11,637 

Cost of sales

8,294 

8,922 

Gross profit

2,353 

2,715 

Selling, general and administrative expenses

1,890 

1,988 

Restructuring charges

1 

(42)

Operating income

462 

769 

Other income (expense):

Investment income (expense) and other

(5)

3 

Interest expense

(6)

(6)

Earnings before income tax expense and equity in income of affiliates

451 

766 

Income tax expense

110 

172 

Equity in income of affiliates

-

1 

Net earnings

$

341 

$

595 

Basic earnings per share

$

1.50 

$

2.35 

Diluted earnings per share

$

1.49 

$

2.32 

Weighted-average common shares outstanding:

Basic

226.8 

253.1 

Diluted

228.4 

256.7 

See Notes to Condensed Consolidated Financial Statements.

 

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)

Three Months Ended

April 30, 2022

May 1, 2021

Net earnings

$

341 

$

595 

Foreign currency translation adjustments, net of tax

(1)

10 

Comprehensive income

$

340 

$

605 

See Notes to Condensed Consolidated Financial Statements.

 


Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)

Three Months Ended

April 30, 2022

May 1, 2021

Operating activities

Net earnings

$

341 

$

595 

Adjustments to reconcile net earnings to total cash provided by (used in) operating activities:

Depreciation and amortization

224 

216 

Restructuring charges

1 

(42)

Stock-based compensation

39 

37 

Other, net

12 

6 

Changes in operating assets and liabilities, net of acquired assets and liabilities:

Receivables

238 

210 

Merchandise inventories

(297)

(90)

Other assets

4 

(6)

Accounts payable

(1,296)

(630)

Income taxes

63 

113 

Other liabilities

(713)

(304)

Total cash provided by (used in) operating activities

(1,384)

105 

Investing activities

Additions to property and equipment

(215)

(161)

Purchases of investments

(1)

(90)

Other, net

3 

(2)

Total cash used in investing activities

(213)

(253)

Financing activities

Repurchase of common stock

(455)

(927)

Dividends paid

(199)

(175)

Other, net

4 

13 

Total cash used in financing activities

(650)

(1,089)

Effect of exchange rate changes on cash and cash equivalents

2 

5 

Decrease in cash, cash equivalents and restricted cash

(2,245)

(1,232)

Cash, cash equivalents and restricted cash at beginning of period

3,205 

5,625 

Cash, cash equivalents and restricted cash at end of period

$

960 

$

4,393 

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 29, 2022

227.4 

$

23 

$

-

$

2,668 

$

329 

$

3,020 

Net earnings, three months ended April 30, 2022

-

-

-

341 

-

341 

Other comprehensive loss:

Foreign currency translation adjustments, net of tax

-

-

-

-

(1)

(1)

Stock-based compensation

-

-

39 

-

-

39 

Issuance of common stock

1.7 

-

9 

-

-

9 

Common stock dividends, $0.88 per share

-

-

4 

(203)

-

(199)

Repurchase of common stock

(4.5)

(1)

(52)

(389)

-

(442)

Balances at April 30, 2022

224.6 

$

22 

$

-

$

2,417