BEST BUY CO INC [BBY] Filings

10-Q 1 bby-20220430x10q.htm 10-Q bby-20220430x10q

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


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

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Table of Contents

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

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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)


	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.

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Table of Contents

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.

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Table of Contents

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.

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Table of Contents

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.

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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 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

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