Best Buy Earnings 2020-05-02

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

bby-20200502x10q

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 May 2, 2020


	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 258,309,045 shares of common stock outstanding as of May 22, 2020.

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Table of Contents

BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED MAY 2, 2020

TABLE OF CONTENTS


Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of May 2, 2020, February 1, 2020, and May 4, 2019			3
	b)	Condensed Consolidated Statements of Earnings for the three months ended May 2, 2020, and May 4, 2019			4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three months ended May 2, 2020, and May 4, 2019			5
	d)	Condensed Consolidated Statements of Cash Flows for the three months ended May 2, 2020, and May 4, 2019			6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended May 2, 2020, and May 4, 2019			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 1A.		Risk Factors			24
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 6.		Exhibits			26
Signatures			27

‎

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)


	May 2, 2020		February 1, 2020		May 4, 2019
Assets
Current assets
Cash and cash equivalents	$	3,919	$	2,229	$	1,561
Receivables, net		749		1,149		833
Merchandise inventories		3,993		5,174		5,195
Other current assets		335		305		425
Total current assets		8,996		8,857		8,014
Property and equipment, net		2,291		2,328		2,334
Operating lease assets		2,631		2,709		2,708
Goodwill		986		984		915
Other assets		701		713		579
Total assets	$	15,605	$	15,591	$	14,550

Liabilities and equity
Current liabilities
Accounts payable	$	4,428	$	5,288	$	4,718
Unredeemed gift card liabilities		257		281		265
Deferred revenue		531		501		409
Accrued compensation and related expenses		213		410		275
Accrued liabilities		769		906		851
Short-term debt		1,250		-		-
Current portion of operating lease liabilities		683		660		639
Current portion of long-term debt		673		14		14
Total current liabilities		8,804		8,060		7,171
Long-term liabilities		694		657		659
Long-term operating lease liabilities		2,076		2,138		2,173
Long-term debt		621		1,257		1,193
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 - 257 million, 256 million and 267 million shares, respectively		26		26		27
Additional paid-in capital		15		-		-
Retained earnings		3,126		3,158		3,038
Accumulated other comprehensive income		243		295		289
Total equity		3,410		3,479		3,354
Total liabilities and equity	$	15,605	$	15,591	$	14,550

NOTE: The Consolidated Balance Sheet as of February 1, 2020, 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
	May 2, 2020		May 4, 2019
Revenue	$	8,562	$	9,142
Cost of sales		6,597		6,973
Gross profit		1,965		2,169
Selling, general and administrative expenses		1,735		1,835
Restructuring charges		1		-
Operating income		229		334
Other income (expense):
Investment income and other		6		14
Interest expense		(17)		(18)
Earnings before income tax expense		218		330
Income tax expense		59		65
Net earnings	$	159	$	265

Basic earnings per share	$	0.61	$	0.99
Diluted earnings per share	$	0.61	$	0.98

Weighted-average common shares outstanding
Basic		258.3		267.6
Diluted		260.4		271.5

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
	May 2, 2020		May 4, 2019
Net earnings	$	159	$	265
Foreign currency translation adjustments, net of tax		(52)		(5)
Comprehensive income	$	107	$	260

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)


	Three Months Ended
	May 2, 2020		May 4, 2019
Operating activities
Net earnings	$	159	$	265
Adjustments to reconcile net earnings to total cash provided by operating activities:
Depreciation and amortization		207		200
Stock-based compensation		15		36
Deferred income taxes		15		13
Other, net		6		1
Changes in operating assets and liabilities:
Receivables		383		182
Merchandise inventories		1,136		207
Other assets		(12)		(14)
Accounts payable		(816)		(519)
Income taxes		31		10
Other liabilities		(297)		(379)
Total cash provided by operating activities		827		2

Investing activities
Additions to property and equipment		(178)		(193)
Other, net		(1)		1
Total cash used in investing activities		(179)		(192)

Financing activities
Repurchase of common stock		(62)		(98)
Dividends paid		(141)		(134)
Borrowings of debt		1,250		-
Other, net		2		6
Total cash provided by (used in) financing activities		1,049		(226)
Effect of exchange rate changes on cash and cash equivalents		(18)		(1)
Increase (decrease) in cash, cash equivalents and restricted cash		1,679		(417)
Cash, cash equivalents and restricted cash at beginning of period		2,355		2,184
Cash, cash equivalents and restricted cash at end of period	$	4,034	$	1,767

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

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 February 1, 2020		256	$	26	$	-	$	3,158	$	295	$	3,479
Net earnings, three months ended May 2, 2020		-		-		-		159		-		159
Other comprehensive loss, net of tax:

Price	66.96	EPS	6
Shares	269	P/E	12
MCap	18,019	P/FCF	19
Net Debt	-44	EBIT	1,811
TEV	17,975	TEV/EBIT	10
TTM 2019-11-02, in MM, except price, ratios

10-Q	2020-05-02	Filed 2020-05-27
10-K	2020-02-01	Filed 2020-03-23
10-Q	2019-11-02	Filed 2019-12-06
10-Q	2019-08-03	Filed 2019-09-06
10-Q	2019-05-04	Filed 2019-06-07
10-K	2019-02-02	Filed 2019-03-28
10-Q	2018-11-03	Filed 2018-12-07
10-Q	2018-08-04	Filed 2018-09-10
10-Q	2018-05-05	Filed 2018-06-08
10-K	2018-02-03	Filed 2018-04-02
10-Q	2017-10-28	Filed 2017-12-01
10-Q	2017-07-29	Filed 2017-09-05
10-Q	2017-04-29	Filed 2017-06-05
10-K	2017-01-28	Filed 2017-03-24
10-Q	2016-10-29	Filed 2016-12-02
10-Q	2016-07-30	Filed 2016-09-02
10-Q	2016-04-30	Filed 2016-06-09
10-K	2016-01-30	Filed 2016-03-23
10-Q	2015-10-31	Filed 2015-12-04
10-Q	2015-08-01	Filed 2015-09-04
10-Q	2015-05-02	Filed 2015-06-08
10-K	2015-01-31	Filed 2015-03-31
10-Q	2014-11-01	Filed 2014-12-05
10-Q	2014-08-02	Filed 2014-09-10
10-Q	2014-05-03	Filed 2014-06-09
10-K	2014-02-01	Filed 2014-03-28
10-Q	2013-08-03	Filed 2013-09-09
10-Q	2013-05-04	Filed 2013-06-07
10-Q	2012-11-03	Filed 2012-12-05
10-Q	2012-08-04	Filed 2012-09-06
10-Q	2012-05-05	Filed 2012-06-13
10-K	2012-03-03	Filed 2012-05-01
10-Q	2011-11-26	Filed 2012-01-03
10-Q	2011-08-27	Filed 2011-09-30
10-Q	2011-05-28	Filed 2011-07-01
10-K	2011-02-26	Filed 2011-04-25
10-Q	2010-11-27	Filed 2011-01-05
10-Q	2010-08-28	Filed 2010-10-07
10-Q	2010-05-29	Filed 2010-07-08
10-K	2010-02-27	Filed 2010-04-28
10-Q	2009-11-28	Filed 2010-01-07

8-K	2020-07-21	Regulation FD, Exhibits
8-K	2020-06-11
8-K	2020-06-09
8-K	2020-05-21
8-K	2020-04-09
8-K	2020-03-19
8-K	2020-03-10
8-K	2020-02-27
8-K	2020-02-04
8-K	2019-12-12
8-K	2019-11-26
8-K	2019-09-25
8-K	2019-08-03
8-K	2019-07-24
8-K	2019-06-14
8-K	2019-05-23
8-K	2019-04-13
8-K	2019-04-08
8-K	2019-02-27
8-K	2018-12-14
8-K	2018-11-20
8-K	2018-09-28
8-K	2018-09-27
8-K	2018-08-28
8-K	2018-08-15
8-K	2018-07-25
8-K	2018-06-12
8-K	2018-05-24
8-K	2018-04-20
8-K	2018-03-22
8-K	2018-03-06
8-K	2018-03-01
8-K	2018-02-28

EX-10.2	bby-20200502xex10_2.htm
EX-10.3	bby-20200502xex10_3.htm
EX-31.1	bby-20200502xex31_1.htm
EX-31.2	bby-20200502xex31_2.htm
EX-32.1	bby-20200502xex32_1.htm
EX-32.2	bby-20200502xex32_2.htm

BBY 10Q Quarterly Report

Best Buy Earnings 2020-05-02