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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 October 30, 2021

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


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

 

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. 


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.

 

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.

 


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)