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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 July 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

 Picture 1

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 225,130,807 shares of common stock outstanding as of September 6, 2022. 


BEST BUY CO., INC.

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

TABLE OF CONTENTS

Part I — Financial Information

3

Item 1.

Financial Statements

3

a)

Condensed Consolidated Balance Sheets as of July 30, 2022, January 29, 2022, and July 31, 2021

3

b)

Condensed Consolidated Statements of Earnings for the three and six months ended July 30, 2022, and July 31, 2021

4

c)

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 30, 2022, and July 31, 2021

5

d)

Condensed Consolidated Statements of Cash Flows for the six months ended July 30, 2022, and July 31, 2021

6

e)

Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended July 30, 2022, and July 31, 2021

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

 

PART I — FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)

July 30, 2022

January 29, 2022

July 31, 2021

Assets

Current assets

Cash and cash equivalents

$

840 

$

2,936 

$

4,340 

Receivables, net

840 

1,042 

883 

Merchandise inventories

6,043 

5,965 

6,417 

Other current assets

621 

596 

400 

Total current assets

8,344 

10,539 

12,040 

Property and equipment, net

2,319 

2,250 

2,226 

Operating lease assets

2,796 

2,654 

2,670 

Goodwill

1,385 

1,384 

986 

Other assets

575 

677 

657 

Total assets

$

15,419 

$

17,504 

$

18,579 

Liabilities and equity

Current liabilities

Accounts payable

$

5,406 

$

6,803 

$

6,946 

Unredeemed gift card liabilities

273 

316 

293 

Deferred revenue

1,133 

1,103 

854 

Accrued compensation and related expenses

374 

845 

605 

Accrued liabilities

820 

946 

892 

Short-term debt

-

-

110 

Current portion of operating lease liabilities

629 

648 

643 

Current portion of long-term debt

15 

13 

14 

Total current liabilities

8,650 

10,674 

10,357 

Long-term operating lease liabilities

2,221 

2,061 

2,090 

Long-term debt

1,184 

1,216 

1,243 

Long-term liabilities

472 

533 

554 

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 - 225.1 million, 227.4 million and 247.3 million shares, respectively

22 

23 

25 

Additional paid-in capital

20 

-

-

Retained earnings

2,522 

2,668 

3,975 

Accumulated other comprehensive income

328 

329 

335 

Total equity

2,892 

3,020 

4,335 

Total liabilities and equity

$

15,419 

$

17,504 

$

18,579 

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

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Revenue

$

10,329 

$

11,849 

$

20,976 

$

23,486 

Cost of sales

8,042 

9,039 

16,336 

17,961 

Gross profit

2,287 

2,810 

4,640 

5,525 

Selling, general and administrative expenses

1,882 

2,009 

3,772 

3,997 

Restructuring charges

34 

4 

35 

(38)

Operating income

371 

797 

833 

1,566 

Other income (expense):

Investment income (loss) and other

3 

3 

(2)

6 

Interest expense

(7)

(6)

(13)

(12)

Earnings before income tax expense and equity in income (loss) of affiliates

367 

794 

818 

1,560 

Income tax expense

58 

64 

168 

236 

Equity in income (loss) of affiliates

(3)

4 

(3)

5 

Net earnings

$

306 

$

734 

$

647 

$

1,329 

Basic earnings per share

$

1.36 

$

2.93 

$

2.86 

$

5.28 

Diluted earnings per share

$

1.35 

$

2.90 

$

2.85 

$

5.22 

Weighted-average common shares outstanding:

Basic

225.4 

250.2 

226.1 

251.7 

Diluted

226.1 

252.8 

227.2 

254.7 

See Notes to Condensed Consolidated Financial Statements.

 

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Net earnings

$

306 

$

734 

$

647 

$

1,329 

Foreign currency translation adjustments, net of tax

-

(3)

(1)

7 

Comprehensive income

$

306 

$

731 

$

646 

$

1,336 

See Notes to Condensed Consolidated Financial Statements.

 


Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)

Six Months Ended

July 30, 2022

July 31, 2021

Operating activities

Net earnings

$

647 

$

1,329 

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

Depreciation and amortization

453 

430 

Restructuring charges

35 

(38)

Stock-based compensation

65 

71 

Other, net

19 

2 

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

Receivables

201 

175 

Merchandise inventories

(79)

(794)

Other assets

(13)

(19)

Accounts payable

(1,434)

(58)

Income taxes

42 

(162)

Other liabilities

(645)

(72)

Total cash provided by (used in) operating activities

(709)

864 

Investing activities

Additions to property and equipment

(441)

(323)

Purchases of investments

(46)

(93)

Sales of investments

2 

60 

Other, net

1 

(2)

Total cash used in investing activities

(484)

(358)

Financing activities

Repurchase of common stock

(465)

(1,323)

Dividends paid

(397)

(350)

Other, net

1 

11 

Total cash used in financing activities

(861)

(1,662)

Effect of exchange rate changes on cash and cash equivalents