2 unchanged sentences
$ in millions, except per share amounts (unaudited)
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Current assets
Cash and cash equivalents
+Added: Short-term investments
Receivables, net
34 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Cost of sales
15 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Foreign currency translation adjustments, net of tax
4 unchanged sentences
$ in millions (unaudited)
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
Operating activities
20 unchanged sentences
Repayments of debt
−Removed: Total cash used in financing activities
+Added: Total cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
9 unchanged sentences
Accumulated Other Comprehensive Income (Loss)
−Removed: Balances at May 1, 2021
−Removed: Net earnings, three months ended July 31, 2021
−Removed: Other comprehensive loss:
+Added: Balances at July 31, 2021
+Added: Net earnings, three months ended October 30, 2021
+Added: Other comprehensive income:
Foreign currency translation adjustments, net of tax
3 unchanged sentences
Repurchase of common stock
−Removed: Balances at July 31, 2021
+Added: Balances at October 30, 2021
Balances at January 30, 2021
−Removed: Net earnings, six months ended July 31, 2021
+Added: Net earnings, nine months ended October 30, 2021
Other comprehensive income:
4 unchanged sentences
Repurchase of common stock
−Removed: Balances at July 31, 2021
−Removed: Balances at May 2, 2020
−Removed: Net earnings, three months ended August 1, 2020
−Removed: Other comprehensive income (loss):
+Added: Balances at October 30, 2021
+Added: Balances at August 1, 2020
+Added: Net earnings, three months ended October 31, 2020
+Added: Other comprehensive income:
Foreign currency translation adjustments, net of tax
3 unchanged sentences
Common stock dividends, $ 0.55 per share
−Removed: Balances at August 1, 2020
+Added: Balances at October 31, 2020
Balances at February 1, 2020
−Removed: Net earnings, six months ended August 1, 2020
+Added: Net earnings, nine months ended October 31, 2020
Other comprehensive loss:
5 unchanged sentences
Repurchase of common stock
−Removed: Balances at August 1, 2020
+Added: Balances at October 31, 2020
See Notes to Condensed Consolidated Financial Statements.
6 unchanged sentences
During the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico.
−Removed: All stores in Mexico were closed as of the end of the first quarter of fiscal 2022, and our International segment will be comprised of operations in Canada going forward.
+Added: All stores in Mexico were closed as of the end of the first quarter of fiscal 2022, and our International segment is now comprised of operations in Canada.
Refer to Note 2, Restructuring , for additional information.
5 unchanged sentences
The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
−Removed: The first six months of fiscal 2022 and fiscal 2021 included 26 weeks.
−Removed: In preparing the accompanying condensed consolidated financial statements, we evaluated the period from July 31, 2021, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure.
−Removed: N o such events were identified for the reported periods.
+Added: The first nine months of fiscal 2022 and fiscal 2021 included 39 weeks.
+Added: In preparing the accompanying condensed consolidated financial statements, we evaluated the period from October 30, 2021, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure.
+Added: Other than the acquisitions described in Note 13, Subsequent Events , n o such events were identified for the reported periods.
Total Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Cash and cash equivalents
1 unchanged sentence
Total cash, cash equivalents and restricted cash
−Removed: Amounts included in restricted cash are primarily restricted to use for workers’ compensation and general liability insurance claims.
+Added: Amounts included in restricted cash are primarily restricted to use for workers’ compensation and general liability insurance claims, and product protection plans provided under our Best Buy Totaltech TM membership offering.
Restructuring
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Mexico Exit and Strategic Realignment (1)
1 unchanged sentence
Retail Operating Model Changes
−Removed: (1) Includes ($ 6 ) million related to inventory markdowns recorded in Cost of sales on our Condensed Consolidated Statements of Earnings for the six months ended July 31, 2021.
+Added: (1) Includes inventory markdowns recorded in Cost of sales on our Condensed Consolidated Statements of Earnings of ($ 6 ) million for the nine months ended October 30, 2021, and $ 36 million for the three and nine months ended October 31, 2020.
Mexico Exit and Strategic Realignment
6 unchanged sentences
Charges incurred in our Domestic segment primarily related to actions taken to align our organizational structure in support of our strategy.
−Removed: During the six months ended July 31, 2021, we recorded a $ 44 million credit primarily due to a reduction in expected termination benefits resulting from adjustments to previously planned organizational changes and higher-than-expected employee retention.
+Added: During the nine months ended October 30, 2021, we recorded a $ 44 million credit primarily due to a reduction in expected termination benefits resulting from adjustments to previously planned organizational changes and higher-than-expected employee retention.
As we continue to evolve our Building the New Blue Strategy, it is possible that we will incur material future restructuring costs, but we are unable to forecast the timing and magnitude of such costs.
All charges incurred related to the exit from Mexico and strategic realignment described above were from continuing operations and were presented as follows ($ in millions):
−Removed: Three Months Ended July 31, 2021
−Removed: Six Months Ended July 31, 2021
+Added: Three Months Ended October 30, 2021
+Added: Nine Months Ended October 30, 2021
Earnings Location
7 unchanged sentences
Restructuring charges
−Removed: Cumulative Amount as of July 31, 2021
+Added: Three and Nine Months Ended October 31, 2020
Earnings Location
6 unchanged sentences
Restructuring charges
+Added: Cumulative Amount as of October 30, 2021
+Added: Earnings Location
+Added: International
+Added: Inventory markdowns
+Added: Cost of sales
+Added: Asset impairments (1)
+Added: Restructuring charges
+Added: Termination benefits
+Added: Restructuring charges
Currency translation adjustment
1 unchanged sentence
Restructuring charges
−Removed: (1) Remaining net carrying value approximates fair value and was immaterial as of July 31, 2021.
+Added: (1) Remaining net carrying value approximates fair value and was immaterial as of October 30, 2021.
(2) Other charges are primarily comprised of contract termination costs.
2 unchanged sentences
International
+Added: Balances at February 1, 2020
+Added: Cash payments
+Added: Balances at October 31, 2020
Balances at January 30, 2021
2 unchanged sentences
Changes in foreign currency exchange rates
−Removed: Balances at July 31, 2021
+Added: Balances at October 30, 2021
(1) Represents adjustments to previously planned organizational changes in our Domestic segment and higher-than-expected employee retention in both our Domestic and International segments.
4 unchanged sentences
All charges incurred were related to termination benefits within our Domestic segment and were presented within Restructuring charges from continuing operations on our Condensed Consolidated Statements of Earnings.
−Removed: As of July 31, 2021, the cumulative amount of charges incurred was $ 41 million and no material liability remains.
+Added: As of October 30, 2021, the cumulative amount of charges incurred was $ 41 million and no material liability remains.
Goodwill and Intangible Assets
−Removed: Balances related to goodwill remained unchanged as of July 31, 2021, January 30, 2021, and August 1, 2020, as follows ($ in millions):
+Added: Balances related to goodwill remained unchanged as of October 30, 2021, January 30, 2021, and October 31, 2020, as follows ($ in millions):
Gross Carrying Amount
4 unchanged sentences
We have definite-lived intangible assets recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Weighted-Average
5 unchanged sentences
Amortization
−Removed: Useful Life Remaining as of July 31, 2021
+Added: Useful Life Remaining as of October 30, 2021 (in years)
Customer relationships
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
Earnings Location
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Amortization expense
12 unchanged sentences
Fair Value Hierarchy
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Money market funds (2)
3 unchanged sentences
Time deposits (3)
+Added: Short-term investments
+Added: Time deposits (3)
Other current assets
17 unchanged sentences
Long-term debt balances were as follows ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Carrying Value
7 unchanged sentences
In addition, we use foreign currency forward contracts not designated as hedging instruments to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies.
−Removed: During the second quarter of fiscal 2021, we entered into Treasury Rate Lock (“T-Lock”) contracts to hedge the base interest rate variability on a portion of our then-expected refinancing of our maturing 2021 Notes.
−Removed: The T-Lock contracts were cash settled upon issuance of our $ 650 million principal amount of notes due October 1, 2030 (“2030 Notes”).
−Removed: The fair value of the T-Lock contracts upon settlement was released from Accumulated other comprehensive income on our Condensed Consolidated Balance Sheets and recorded in Interest expense on our Condensed Consolidated Statements of Earnings as interest is accrued over the life of the 2030 Notes.
Our derivative instruments designated as net investment hedges and interest rate swaps are recorded on our Condensed Consolidated Balance Sheets at fair value.
2 unchanged sentences
Contract Type
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Derivatives designated as net investment hedges
Derivatives designated as interest rate swaps
−Removed: Derivatives designated as cash flow hedges
No hedge designation (foreign exchange contracts)
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: Earnings Location
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: Statement of Earnings Location
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Interest rate swap contracts
7 unchanged sentences
The Five-Year Facility Agreement permits borrowings of up to $ 1.25 billion and expires in May 2026.
−Removed: The interest rate under the Five-Year Facility Agreement is variable and is determined at our option as:
−Removed: (i) the sum of (a) the greatest of (1) JPMorgan Chase Bank, N.A.’s prime rate, (2) the greater of the federal funds rate and the overnight bank funding rate plus, in each case, 0.5 %, and (3) the one-month London Interbank Offered Rate (“LIBOR”), subject to certain adjustments plus 1 %, and (b) a variable margin rate (the “ABR Margin”);
−Removed: or (ii) the LIBOR plus a variable margin rate (the “LIBOR Margin”).
−Removed: In addition, a facility fee is assessed on the commitment amount.
−Removed: The ABR Margin, LIBOR Margin and the facility fee are based upon our current senior unsecured debt rating.
−Removed: Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.00 % to
−Removed: 0.225 %, the LIBOR Margin ranges from 0.805 % to 1.225 %, and the facility fee ranges from 0.07 % to 0.15 %.
−Removed: Additionally, the Five-Year Facility Agreement includes fallback language related to the transition from LIBOR to alternative rates.
−Removed: The Five-Year Facility Agreement is guaranteed by certain of our subsidiaries and contains customary affirmative and negative covenants.
−Removed: Among other things, these covenants restrict our and certain of our subsidiaries’ abilities to incur liens on certain assets;
−Removed: make material changes in corporate structure or the nature of our business;
−Removed: dispose of material assets;
−Removed: engage in certain mergers, consolidations and other fundamental changes;
−Removed: or engage in certain transactions with affiliates.
−Removed: The Five-Year Facility Agreement also contains covenants that require us to maintain a maximum cash flow leverage ratio.
−Removed: The Five-Year Facility Agreement contains default provisions including, but not limited to, failure to pay interest or principal when due and failure to comply with covenants.
−Removed: In the first quarter of fiscal 2021, in light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a short-term draw on the full amount of our Previous Facility on March 19, 2020, which remained outstanding until July 27, 2020, when the Previous Facility was repaid in full.
−Removed: There were no borrowings outstanding under the Five-Year Facility Agreement as of July 31, 2021, or the Previous Facility as of January 30, 2021, and August 1, 2020.
+Added: There were no borrowings outstanding under the Five-Year Facility Agreement as of October 30, 2021, or the Previous Facility as of January 30, 2021, and October 31, 2020.
In conjunction with a solar energy investment, we were advanced $ 110 million due October 31, 2021.
−Removed: The advance is recorded within Short-term debt on our Condensed Consolidated Balance Sheets and bears interest at 0.14 %.
+Added: The advance was recorded within Short-term debt on our Condensed Consolidated Balance Sheets as of January 30, 2021, and bore interest at 0.14 %.
+Added: This advance was repaid on October 29, 2021.
Long-Term Debt
Long-term debt consisted of the following ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Interest rate swap valuation adjustments
5 unchanged sentences
See Note 4, Fair Value Measurements , for the fair value of long-term debt.
−Removed: We generate substantially all of our revenue from contracts with customers from the sale of products and services.
+Added: We generate substantially all of our revenue from contracts with customers for the sale of products and services.
Contract balances primarily consist of receivables and liabilities related to product merchandise not yet delivered to customers, unredeemed gift cards, services not yet completed and options that provide a material right to customers, such as our customer loyalty programs.
Contract balances were as follows ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Receivables, net (1)
3 unchanged sentences
Accrued liabilities
−Removed: (1) Receivables are recorded net of allowances for doubtful accounts of $ 24 million, $ 32 million and $ 28 million as of July 31, 2021, January 30, 2021, and August 1, 2020, respectively.
−Removed: During the first six months of fiscal 2022 and fiscal 2021, $ 866 million and $ 662 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods.
+Added: (1) Receivables are recorded net of allowances for doubtful accounts of $ 24 million, $ 32 million and $ 30 million as of October 30, 2021, January 30, 2021, and October 31, 2020, respectively.
+Added: During the first nine months of fiscal 2022 and fiscal 2021, $ 1,001 million and $ 792 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods.
See Note 12, Segments , for information on our revenue by reportable segment and product category.
3 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Weighted-average common shares outstanding
1 unchanged sentence
Weighted-average common shares outstanding, assuming dilution
−Removed: Potential shares which were anti-dilutive and excluded from weighted-average share computations
Basic earnings per share
7 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Total cost of shares repurchased
1 unchanged sentence
Number of shares repurchased
−Removed: As of July 31, 2021, $ 3.8 billion of the $ 5.0 billion share repurchase authorization was available.
−Removed: Between the end of the second quarter of fiscal 2022 on July 31, 2021, and August 27, 2021, we repurchased an incremental 1.4 million shares of our common stock at a cost of $ 160 million.
+Added: As of October 30, 2021, $ 3.4 billion of the $ 5.0 billion share repurchase authorization was available.
+Added: Between the end of the third quarter of fiscal 2022 on October 30, 2021, and December 1, 2021, we repurchased an incremental 3.6 million shares of our common stock at a cost of $ 452 million.
Unrecognized Tax Benefits
Our income tax returns are routinely examined by domestic and foreign tax authorities.
−Removed: During the second quarter of fiscal 2022, we reduced our unrecognized tax benefits by $ 101 million relating to multi-jurisdiction, multi-year non-cash benefits from the resolution of certain discrete tax matters, all of which resulted in a tax benefit in the current quarter.
+Added: During the second quarter of fiscal 2022, we reduced our unrecognized tax benefits by $ 101 million relating to multi-jurisdiction, multi-year non-cash benefits from the resolution of certain discrete tax matters, all of which resulted in a tax benefit in the second quarter.
Contingencies
3 unchanged sentences
We provide disclosure of matters where we believe it is reasonably possible the impact may be material to our Condensed Consolidated Financial Statements.
−Removed: Segment and product category revenue information was as follows ($ in millions):
+Added: Reportable segment and product category revenue information was as follows ($ in millions):
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Revenue by reportable segment
11 unchanged sentences
Total International revenue
−Removed: Operating income by reportable segment and the reconciliation to consolidated earnings before income tax expense and equity in income of affiliates was as follows ($ in millions):
+Added: Operating income (loss) by reportable segment and the reconciliation to consolidated earnings before income tax expense and equity in income of affiliates was as follows ($ in millions):
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
International
5 unchanged sentences
Assets by reportable segment were as follows ($ in millions):
−Removed: July 31, 2021
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
International
+Added: Subsequent Events
+Added: On October 10, 2021, we signed a definitive agreement to acquire Current Health Ltd.
+Added: (“Current Health”), a care-at-home technology platform that brings together remote patient monitoring, telehealth and patient engagement into a single solution for healthcare organizations, for approximately $ 400 million.
+Added: The acquisition was completed on November 2, 2021, and will be included in our consolidated results beginning in the fourth quarter of fiscal 2022.
+Added: On October 18, 2021, we signed a definitive agreement to acquire Two Peaks, LLC d/b/a Yardbird Furniture (“Yardbird”), an outdoor furniture company, for approximately $ 85 million.
+Added: The acquisition was completed on November 4, 2021, and will be included in our consolidated results beginning in the fourth quarter of fiscal 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations
21 unchanged sentences
During the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico.
−Removed: All stores in Mexico were closed as of the end of the first quarter of fiscal 2022, and our International segment will be comprised of operations in Canada going forward.
+Added: All stores in Mexico were closed as of the end of the first quarter of fiscal 2022, and our International segment is now comprised of operations in Canada.
Refer to Note 2, Restructuring , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, for additional information.
26 unchanged sentences
For these reasons, our internal management reporting also includes non-GAAP financial measures.
−Removed: Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill impairments, price-fixing settlements, gains and losses on investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items.
+Added: Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill impairments, price-fixing settlements, gains and losses on investments, intangible asset amortization, certain acquisition-related transaction costs and the tax effect of all such items.
In addition, certain other items may be excluded from non-GAAP financial measures when we believe doing so provides greater clarity to management and our investors.
9 unchanged sentences
Business Strategy Update
−Removed: Throughout the second quarter of fiscal 2022, we provided customers multiple ways to interact with us depending on their needs, preference and comfort.
−Removed: Similar to the first quarter of fiscal 2022, customers migrated back into our stores to touch and feel products and to seek in-person expertise and service.
−Removed: At the same time, they continued to interact with us digitally at a significantly higher rate than pre-pandemic, as online sales were 32% of Domestic revenues compared to 16% in the second quarter of fiscal 2020.
−Removed: Phone and chat volume also remained high compared to pre-pandemic levels, and sales via these channels continued to climb.
−Removed: In addition, we are continuing to interact with customers in their homes — making large-product deliveries, installing solutions, repairing products and providing sales consultations.
−Removed: For customers purchasing online, we delivered product with speed and convenience.
−Removed: Online sales package delivery was not only faster than the second quarter of last year, when our online sales increased 242%, but faster than the second quarter of fiscal 2020 as well.
−Removed: We continued to roll out and run several tests and pilots during the quarter as we determine the best path forward to become even more customer-centric, digitally-focused and efficient.
−Removed: We believe this is crucial to thriving in a new and different environment where customers expect to seamlessly interact with physical and digital channels throughout the shopping journey as they seek inspiration, research, convenience and support.
−Removed: One of these pilots was a new membership program.
−Removed: Based on the positive pilot results, we plan to scale the program nationally in stores and online at the end of the third quarter of fiscal 2022 under the name Best Buy Totaltech.
−Removed: Totaltech is designed to give our customers the confidence that whatever their technology needs are, we will be there to help.
−Removed: The goal is to create a membership experience that customers will love, which in turn results in a higher customer lifetime value and drives a larger share of consumer electronics spend to Best Buy.
−Removed: Over the longer term, we are fundamentally in a stronger position than we expected to be in just two years ago.
+Added: Throughout the third quarter of fiscal 2022, we provided customers multiple ways to interact with us depending on their needs, preference and comfort.
+Added: Similar to the first half of fiscal 2022, customers migrated back into our stores to touch and feel products and to seek in-person expertise and service.
+Added: At the same time, they continued to interact with us digitally at a significantly higher rate than before the pandemic.
+Added: Online sales were 31% of Domestic revenue compared to 16% in the third quarter of fiscal 2020, growing by more than $2 billion during that time.
+Added: During the third quarter, we reached our fastest small-product delivery times ever as same-day delivery was up 400% and we nearly doubled the percentage of products delivered within one day compared to last year.
+Added: Product availability continued to improve throughout the quarter.
+Added: While we had areas of product constraints, we do not believe this materially limited our overall sales growth.
+Added: We are proactively navigating supply chain challenges, including delays and higher costs, by making strategic sourcing and inventory decisions earlier in the year to set us up well heading into holiday, pulling up product flow, adjusting store assortment based on availability and acquiring additional, alternative transportation.
+Added: In addition, we believe the deep, longstanding relationships we have with our transportation and logistics partners and our product vendors have been instrumental in helping us manage through the difficult supply chain environment.
+Added: We believe we have made the right investment decisions to position us as a leader in omnichannel retailing.
+Added: We also believe there are even more opportunities ahead of us and that it is important to build on our position of strength to become even more customer-centric, digitally-focused and efficient.
+Added: During the quarter, we launched our new membership program, Best Buy Totaltech TM , nationally and online.
+Added: Totaltech leverages our strengths across merchandising, fulfillment, installation, tech support and product repair and is designed to give our customers the confidence that whatever their technology needs are, we will be there to help.
+Added: Members receive product discounts and priority access to certain in-demand products, free delivery and standard installation, free technical support, up to 24 months of product protection on most purchases with active membership and other benefits.
+Added: The goal of Totaltech is to create a membership experience that customers will love, and in turn, to generate a higher customer lifetime value and drive a larger share of consumer electronics spending to Best Buy.
+Added: We also continued to conduct several store tests and pilots during the quarter to continue our omnichannel evolution in a way that provides equal focus on all the ways customers shop with us.
+Added: At the same time, we are piloting and evolving our labor models to meet our customers’ changing shopping behaviors.
+Added: That means leveraging technology in stores that do not have as much labor and developing a much more flexible workforce.
+Added: This is a workforce that not only provides expert help across product categories both in-store and virtually, but also flexes into other activities like curbside fulfillment, and this approach also empowers employees with the flexibility to pick up shifts at other stores or at our distribution centers.
+Added: We continue to believe that we are fundamentally in a stronger position than we expected to be in just two years ago.
We believe there has been a structural increase in the need for technology, and that we now serve a larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect structural life changes, like hybrid work and streaming entertainment content.
8 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Revenue % change
7 unchanged sentences
(1) Because retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers’ corresponding rates.
−Removed: For additional information regarding costs classified in cost of sales and SG&A, refer to Note 1, Summary of Significant Accounting Policies , in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
−Removed: In the second quarter and first six months of fiscal 2022, we generated $11.8 billion and $23.5 billion in revenue, and our comparable sales grew 19.6% and 27.7%, respectively.
−Removed: We continued to experience high demand for technology products and services, as consumers continued to leverage technology to meet their needs, and we provided solutions that help them work, learn, entertain, cook and connect at home.
−Removed: The demand was also bolstered by overall strong consumer spending, aided by government stimulus, improving wages and high savings levels.
−Removed: Our strong sales performance resulted in operating income rate expansion of 100 basis points and 240 basis points during the second quarter and first six months of fiscal 2022, respectively.
−Removed: Revenue, gross profit, SG&A and operating income rate changes in the second quarter and first six months of fiscal 2022 were primarily driven by our Domestic segment.
−Removed: For further discussion of each segment’s performance, see the Segment Performance Summary below.
+Added: For additional information regarding costs classified in cost of sales and SG&A, refer to Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
+Added: In the third quarter and first nine months of fiscal 2022, we generated $11.9 billion and $35.4 billion in revenue, and our comparable sales grew 1.6% and 17.5%, respectively.
+Added: We continued to experience demand for technology products and services, as consumers continued to leverage technology to meet their needs, and we provided solutions that help them work, learn, entertain, cook and connect at home.
+Added: Our performance resulted in operating income rate increases of 0.9% and 1.8% during the third quarter and first nine months of fiscal 2022, respectively.
+Added: See the Segment Performance Summary below for discussion of our Domestic and International segments’ performance.
Income Tax Expense
−Removed: Income tax expense decreased in the second quarter of fiscal 2022 primarily due to the resolution of certain discrete tax matters, partially offset by the impact of increased pre-tax earnings.
−Removed: Our effective tax rate (“ETR”) decreased to 8.0% in the second quarter of fiscal 2022 compared to 22.9% in the second quarter of fiscal 2021, primarily due to the resolution of certain discrete tax matters.
−Removed: Refer to Note 10, Income Taxes , in the Notes to Condensed Consolidated Financial Statements for additional information.
−Removed: Income tax expense increased in the first six months of fiscal 2022 primarily due to an increase in pre-tax earnings, partially offset by the resolution of certain discrete tax matters.
−Removed: Our ETR decreased to 15.1% in the first six months of fiscal 2022 compared to 24.2% in the first six months of fiscal 2021, primarily due to the resolution of certain discrete tax matters.
+Added: Income tax expense remained relatively unchanged in the third quarter of fiscal 2022.
+Added: Our effective tax rate (“ETR”) decreased to 25.1% in the third quarter of fiscal 2022 compared to 29.6% in the third quarter of fiscal 2021, primarily due to a decrease in losses for which tax benefits were not recognized.
+Added: Income tax expense increased in the first nine months of fiscal 2022, primarily due to an increase in pre-tax earnings, partially offset by the resolution of certain discrete tax matters which occurred during the second quarter of fiscal 2022.
+Added: Our ETR decreased to 18.1% in the first nine months of fiscal 2022 compared to 26.4% in the first nine months of fiscal 2021, primarily due to the resolution of certain discrete tax matters which occurred during the second quarter of fiscal 2022, as well as a decrease in losses for which tax benefits were not recognized.
+Added: Refer to Note 10, Income Taxes , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, for additional information.
Our tax provision for interim periods is determined using an estimate of our annual ETR, adjusted for discrete items, if any, that are taken into account in the relevant period.
6 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Revenue % change
10 unchanged sentences
(1) Online sales are included in the comparable sales calculation.
−Removed: The increase in revenue in the second quarter and first six months of fiscal 2022 was primarily driven by comparable sales growth across almost all of our product categories, partially offset by the loss of revenue from permanent store closures in the past year.
−Removed: Online revenue of $3.5 billion and $7.1 billion in the second quarter and first six months of fiscal 2022 decreased 28.1% and 13.5%, respectively, on a comparable basis, primarily due to channel shifts in customer shopping behavior as a result of the COVID-19 pandemic and temporary store closures in the prior year.
−Removed: Domestic segment stores open at the beginning and end of the second quarters of fiscal 2022 and fiscal 2021, excluding stores that were temporarily closed as a result of COVID-19, were as follows:
−Removed: Total Stores at Beginning of Second Quarter
+Added: The increase in revenue in the third quarter and first nine months of fiscal 2022 was primarily driven by comparable sales growth across most of our product categories, partially offset by the loss of revenue from permanent store closures in the past year.
+Added: Online revenue of $3.4 billion and $10.5 billion in the third quarter and first nine months of fiscal 2022 decreased 10.1% and 12.5%, respectively, on a comparable basis, primarily due to channel shifts in customer shopping behavior as a result of the COVID-19 pandemic.
+Added: Domestic segment stores open at the beginning and end of the third quarters of fiscal 2022 and fiscal 2021, excluding stores that were temporarily closed as a result of COVID-19, were as follows:
+Added: Total Stores at Beginning of Third Quarter
Stores Opened
Stores Closed
−Removed: Total Stores at End of Second Quarter
−Removed: Total Stores at Beginning of Second Quarter
+Added: Total Stores at End of Third Quarter
+Added: Total Stores at Beginning of Third Quarter
Stores Opened
Stores Closed
−Removed: Total Stores at End of Second Quarter
+Added: Total Stores at End of Third Quarter
Outlet Centers
6 unchanged sentences
Three Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Computing and Mobile Phones
1 unchanged sentence
Entertainment
−Removed: Continued strong demand for technology products and services with a focus on the home, including working, learning, entertaining and cooking, contributed to our Domestic comparable sales growth across most of our categories.
Notable comparable sales changes were as follows:
Computing and Mobile Phones:
−Removed: The 11.4% comparable sales gain was driven primarily by computing, mobile phones and wearables.
+Added: The 2.4% comparable sales decline was driven primarily by computing, networking and tablets, partially offset by a comparable sales gain in mobile phones.
Consumer Electronics:
−Removed: The 27.4% comparable sales gain was driven primarily by home theater, digital imaging, headphones and portable speakers.
+Added: The 5.5% comparable sales gain was driven primarily by home theater, headphones and portable speakers and health and fitness.
Appliances:
−Removed: The 31.1% comparable sales gain was primarily driven by large appliances.
+Added: The 10.9% comparable sales gain was driven primarily by large appliances.
Entertainment:
−Removed: The 36.4% comparable sales gain was driven primarily by gaming and virtual reality.
−Removed: The 23.6% comparable sales gain was primarily driven by support and warranty services .
−Removed: Our gross profit rate increased in the second quarter and first six months of fiscal 2022, primarily driven by favorable product margin rates, including reduced promotions, and rate improvement from supply chain costs resulting from a lower mix of online revenue compared to the prior year.
−Removed: Our gross profit also increased in the second quarter of fiscal 2022 due to higher profit-sharing revenue from our private label and co-branded credit card arrangement.
−Removed: Our SG&A increased in the second quarter and first six months of fiscal 2022, primarily due to pandemic-related actions last year, which resulted in higher costs this year for short-term incentive compensation, store payroll, advertising, medical claims and our 401(k) employer match.
−Removed: In addition, SG&A increased due to investments in support of our technology initiatives.
−Removed: The restructuring credit in the first six months of fiscal 2022 primarily related to a reduction in termination benefits resulting from adjustments to previously planned organizational changes and higher-than-expected retention rates.
+Added: The 4.1% comparable sales gain was driven primarily by gaming.
+Added: The 5.6% comparable sales decline was driven primarily by the launch of our Totaltech membership offering that includes benefits that were previously stand-alone revenue-generating services, such as warranty and installation.
+Added: Our gross profit rate decreased in the third quarter of fiscal 2022, primarily driven by lower product margin rates due to lapping low levels of promotions, product damages and product returns last year, as well as increased inventory shrink primarily due to theft.
+Added: Our gross profit rate also decreased from lower services margin rates, which included rate pressure associated with our Totaltech membership offering that includes incremental customer benefits, and associated costs, compared to our previous Total Tech Support offer.
+Added: These decreases were partially offset by higher profit-sharing revenue from our private label and co-branded credit card arrangement.
+Added: Our gross profit rate increased in the first nine months of fiscal 2022, primarily driven by product margin rate improvement from supply chain costs resulting from a lower mix of online revenue compared to the prior year, higher profit-sharing revenue from our private label and co-branded credit card arrangement and favorability from reduced promotions.
+Added: These increases were partially offset by lower services margin rates.
+Added: Our SG&A increased in the third quarter of fiscal 2022, primarily due to higher advertising expenses and increased technology investments, which were partially offset by lapping last year’s $40 million donation to the Best Buy Foundation and lower incentive compensation.
+Added: Our SG&A increased in the first nine months of fiscal 2022, primarily due to higher short-term incentive compensation, technology investments, advertising expenses and store payroll expenses, which included $81 million of employee retention credits in the prior year period as a result of the Federal Coronavirus Aid, Relief and Economic Security Act.
+Added: This was partially offset by lapping last year’s $40 million donation to the Best Buy Foundation.
+Added: The restructuring charges in the third quarter and first nine months of fiscal 2021 primarily related to termination benefits associated with actions taken to more broadly align our corporate organizational structure in support of our strategy.
+Added: The restructuring credit in the first nine months of fiscal 2022 primarily related to subsequent adjustments to termination benefits resulting from changes in our previously planned organizational changes and higher-than-expected retention rates.
Refer to Note 2, Restructuring , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, for additional information.
−Removed: Our operating income rate increased in the second quarter and first six months of fiscal 2022, primarily driven by the favorability in gross profit rate described above and increased leverage from higher sales volume on our fixed expenses, which resulted in favorable SG&A rates.
+Added: Our operating income rate decreased in the third quarter of fiscal 2022, primarily driven by the unfavorable gross profit rate described above, partially offset by lower restructuring charges and increased leverage from higher sales volume on our fixed expenses, which resulted in a favorable SG&A rate.
+Added: Our operating income rate increased in the first nine months of fiscal 2022, primarily driven by the favorability in gross profit rate described above and increased leverage from higher sales volume on our fixed expenses, which resulted in a favorable SG&A rate.
International
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Revenue % change
3 unchanged sentences
Restructuring charges
−Removed: Operating income
−Removed: Operating income as a % of revenue
−Removed: The increase in revenue in the second quarter of fiscal 2022 was primarily driven by the benefit of 1,070 basis points of favorable foreign currency exchange rate fluctuations and comparable sales growth of 5.0%.
−Removed: In the first six months of fiscal 2022, revenue increased primarily from comparable sales growth of 15.0% and the benefit of 1,040 basis points of favorable foreign currency exchange rate fluctuations.
−Removed: These increases were partially offset by lower revenue in Mexico in the second quarter and first six months of fiscal 2022 of $60 million and $129 million, respectively, as a result of our decision in the third quarter of fiscal 2021 to exit operations.
−Removed: International segment stores open at the beginning and end of the second quarters of fiscal 2022 and fiscal 2021, excluding stores that were temporarily closed as a result of COVID-19, were as follows:
−Removed: Total Stores at Beginning of Second Quarter
+Added: Operating income (loss)
+Added: Operating income (loss) as a % of revenue
+Added: The decrease in revenue in the third quarter of fiscal 2022 was primarily driven by lower revenue in Mexico as a result of our decision in the third quarter of fiscal 2021 to exit operations and a comparable sales decline of 3.0% in Canada.
+Added: These decreases were partially offset by the benefit of approximately 4.5% of favorable foreign currency exchange rates.
+Added: The increase in revenue in the first nine months of fiscal 2022 was primarily driven by the benefit of approximately 8.0% of favorable foreign currency exchange rates and comparable sales growth of 7.7%.
+Added: These increases were partially offset by lower revenue in Mexico as a result of our decision in the third quarter of fiscal 2021 to exit operations.
+Added: International segment stores open at the beginning and end of the third quarters of fiscal 2022 and fiscal 2021, excluding stores that were temporarily closed as a result of COVID-19, were as follows:
+Added: Total Stores at Beginning of Third Quarter
Stores Opened
Stores Closed
−Removed: Total Stores at End of Second Quarter
−Removed: Total Stores at Beginning of Second Quarter
+Added: Total Stores at End of Third Quarter
+Added: Total Stores at Beginning of Third Quarter
Stores Opened
Stores Closed
−Removed: Total Stores at End of Second Quarter
+Added: Total Stores at End of Third Quarter
Best Buy Mobile
4 unchanged sentences
Three Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Computing and Mobile Phones
1 unchanged sentence
Entertainment
−Removed: Similar to the Domestic segment, continued strong demand for technology products and services with a focus on the home, including working, learning, entertaining and cooking, contributed to our International segment’s comparable sales growth across most of our categories.
Notable comparable sales changes were as follows:
2 unchanged sentences
Consumer Electronics:
−Removed: The 11.8% comparable sales gain was driven primarily by home theater.
+Added: The 0.8% comparable sales decline was driven primarily by digital imaging and headphones and portable speakers.
Appliances:
−Removed: The 11.6% comparable sales gain was primarily driven by large appliances.
+Added: The 1.8% comparable sales decline was driven primarily by large appliances.
Entertainment:
−Removed: The 13.7% comparable sales gain was driven primarily by gaming, virtual reality and drones.
−Removed: The 2.2% comparable sales gain was primarily due to our repair and warranty services.
−Removed: Our gross profit rate increased in the second quarter and first six months of fiscal 2022, primarily driven by sales mixing out of Mexico, which had a lower gross profit rate than Canada.
−Removed: Our SG&A increased in the second quarter of fiscal 2022, primarily due to the unfavorable impact of foreign currency exchange rates and increased store payroll and incentive compensation expenses in Canada, partially offset by lower expenses in Mexico as a result of our decision to exit operations there.
−Removed: Our SG&A increased in the first six months of fiscal 2022, primarily due to the unfavorable impact of foreign currency exchange rates and increased incentive compensation expense in Canada, partially offset by lower expenses in Mexico as a result of our decision to exit operations there.
−Removed: Restructuring charges in the second quarter and first six months of fiscal 2022 primarily related to our decision to exit operations in Mexico.
+Added: The 15.0% comparable sales gain was driven primarily by gaming and virtual reality.
+Added: The 2.2% comparable sales decline was driven primarily by our repair services.
+Added: The increases in our gross profit rate in the third quarter and first nine months of fiscal 2022 were primarily driven by improved product margin rates in Canada and sales mixing out of Mexico, which had a lower gross profit rate than Canada.
+Added: The increases were also driven by $36 million of inventory markdowns incurred in the prior year associated with our decision to exit operations in Mexico.
+Added: Our SG&A decreased in the third quarter of fiscal 2022, primarily due to lower expenses in Mexico as a result of our decision to exit operations, partially offset by the unfavorable impact of foreign currency exchange rates and increased store payroll expense in Canada.
+Added: Our SG&A increased in the first nine months of fiscal 2022, primarily due to the unfavorable impact of foreign currency exchange rates and increased incentive compensation and store payroll expense in Canada, partially offset by lower expenses in Mexico as a result of our decision to exit operations.
+Added: The restructuring charges for all periods presented primarily related to our decision to exit operations in Mexico.
Refer to Note 2, Restructuring , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, for additional information.
−Removed: Our operating income rate decreased in the second quarter of fiscal 2022, primarily due to the unfavorable SG&A rate and restructuring charges, partially offset by the favorability in gross profit rate described above.
−Removed: Our operating income rate increased in the first six months of fiscal 2022, primarily due to the favorability in gross profit rate described above and increased leverage from higher sales volume on our fixed expenses, which resulted in a favorable SG&A rate.
+Added: Our operating income rate increased in the third quarter of fiscal 2022, primarily due to lower restructuring charges and the favorability in gross profit rate described above.
+Added: Our operating income rate increased in the first nine months of fiscal 2022, primarily due to the favorability in gross profit rate described above, lower restructuring charges and increased leverage from higher sales volume on our fixed expenses, which resulted in a favorable SG&A rate.
Consolidated Non-GAAP Financial Measures
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Operating income
Intangible asset amortization (1)
+Added: Acquisition-related transaction costs (1)
Restructuring charges (2)
6 unchanged sentences
Intangible asset amortization (1)
+Added: Acquisition-related transaction costs (1)
Restructuring charges (2)
2 unchanged sentences
Non-GAAP diluted EPS
−Removed: (1) Represents the non-cash amortization of definite-lived intangible assets associated with acquisitions, including customer relationships, tradenames and developed technology.
−Removed: (2) Represents adjustments to previously planned organizational changes and higher-than-expected retention rates in the Domestic segment and charges and subsequent adjustments associated with the decision to exit operations in Mexico in the International segment for the periods ended July 31, 2021.
−Removed: Represents charges associated with U.S.
−Removed: retail operating model changes for the periods ended August 1, 2020.
+Added: (1) Represents charges associated with acquisitions, including:
+Added: (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology;
+Added: and (2) acquisition-related transaction and due diligence costs, primarily comprised of professional fees.
+Added: (2) Represents charges and subsequent adjustments related to actions taken in the Domestic segment to better align the company’s organizational structure with its strategic focus and the decision to exit operations in Mexico in the International segment.
(3) Represents inventory markdown adjustments recorded within cost of sales associated with the decision to exit operations in Mexico.
3 unchanged sentences
There is no income tax charge for the Mexico non-GAAP items, as there was no tax benefit recognized on these expenses in the calculation of GAAP income tax expense.
−Removed: Our non-GAAP operating income rate increased in the second quarter and first six months of fiscal 2022, primarily driven by higher gross profit rates due to favorable product margin rates and rate improvement from supply chain costs, and increased leverage from higher sales volume on our fixed expenses, which resulted in favorable SG&A rates.
−Removed: Our non-GAAP effective tax rate decreased in the second quarter and first six months of fiscal 2022, primarily due to the resolution of certain discrete tax matters.
−Removed: Refer to Note 10, Income Taxes , in the Notes to Condensed Consolidated Financial Statements for additional information.
−Removed: Our non-GAAP diluted EPS increased in the second quarter and first six months of fiscal 2022, primarily driven by the increase in non-GAAP operating income and the lower non-GAAP effective tax rate.
+Added: Our non-GAAP operating income rate decreased in the third quarter of fiscal 2022, primarily driven by a lower gross profit rate in our Domestic segment.
+Added: Our non-GAAP operating income rate increased in the first nine months of fiscal 2022, primarily driven by a higher gross profit rate due to favorable supply chain costs resulting from a lower mix of online revenue compared to the prior year, and increased leverage from higher sales volume on our fixed expenses, which resulted in a favorable SG&A rate.
+Added: Our non-GAAP effective tax rate remained relatively unchanged in the third quarter of fiscal 2022.
+Added: Our non-GAAP effective tax rate decreased in the first nine months of fiscal 2022, primarily due to the resolution of certain discrete tax matters which occurred during the second quarter of fiscal 2022.
+Added: Refer to Note 10, Income Taxes , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, for additional information.
+Added: Our non-GAAP diluted EPS increased in the third quarter of fiscal 2022, primarily driven by lower diluted weighted-average common shares outstanding from share purchases.
+Added: Our non-GAAP diluted EPS increased in the first nine months of fiscal 2022, primarily driven by the increase in non-GAAP operating income, the lower non-GAAP effective tax rate and lower diluted weighted-average common shares outstanding from share purchases.
Liquidity and Capital Resources
3 unchanged sentences
We have a disciplined approach to capital allocation, which focuses on investing in key priorities that support our strategy.
−Removed: Cash and cash equivalents were as follows ($ in millions):
−Removed: July 31, 2021
+Added: Cash, cash equivalents and short-term investments were as follows ($ in millions):
+Added: October 30, 2021
January 30, 2021
−Removed: August 1, 2020
+Added: October 31, 2020
Cash and cash equivalents
−Removed: The decreases in cash and cash equivalents from July 31, 2021, compared to January 30, 2021, and August 1, 2020, were primarily due to share repurchases , which were temporarily suspended from March to November 2020, partially offset by the excess of operating cash flows from higher earnings over capital spending and dividends.
+Added: Short-term investments
+Added: Total cash, cash equivalents and short-term investments
+Added: The decrease in cash and cash equivalents from January 30, 2021, was primarily due to increases in share repurchases, capital expenditures and dividend payments.
+Added: This was partially offset by positive cash flows from operations, primarily driven by earnings.
+Added: The decrease in cash, cash equivalents and short-term investments from October 31, 2020, was primarily due to increases in share repurchases, the repayment of our $650 million principal amount of notes due March 15, 2021, capital expenditures and dividend payments.
+Added: This was partially offset by positive cash flows from operations, primarily driven by earnin g s.
Cash flows from total operations were as follows ($ in millions):
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
Total cash provided by (used in):
5 unchanged sentences
Operating Activities
−Removed: The decrease in cash provided by operating activities in the first half of fiscal 2022 was primarily due to changes in inventory, which saw a decrease in receipts in the prior-year period from measures taken in light of COVID-19 and an increase in receipts in the current-year period to match our inventory levels to increased demand.
−Removed: Changes in accounts payable also contributed to the decrease from favorable payment terms with vendors in the prior-year period.
+Added: The decrease in cash provided by operating activities in the first nine months of fiscal 2022 compared to the prior-year period was primarily due to the timing and volume of inventory purchases and payments, reflecting an earlier and more pronounced build of inventory for the holiday season in fiscal 2022, as we sought to manage supply chain challenges and sustained strong demand in most product categories.
+Added: As a result, our inventory balance at the end of the third quarter of fiscal 2022 was materially higher than fiscal 2021, and a larger proportion of inventory purchases had been paid for by the end of the quarter.
These decreases were partially offset by higher earnings in the current-year period.
Investing Activities
−Removed: The decrease in cash used in investing activities in the first half of fiscal 2022 was primarily driven by an increase in sales of short-term investments.
+Added: The decrease in cash used in investing activities in the first nine months of fiscal 2022 compared to the prior-year period was primarily driven by a decrease in purchases of short-term investments.
Financing Activities
−Removed: The increase in cash used in financing activities in the first half of fiscal 2022 was driven primarily by an increase in share repurchases.
−Removed: In fiscal 2021, w e temporarily suspended share repurchases from March to November 2020.
−Removed: In addition, we increased the quarterly dividend rate from $0.55 to $0.70 in fiscal 2022.
+Added: The increase in cash used in financing activities in the first nine months of fiscal 2022 compared to the prior-year period was driven primarily by an increase in share repurchases, which were temporarily suspended from March to November of fiscal 2021.
+Added: Fiscal 2021 also included the issuance of our $650 million principal amount of notes due October 1, 2030.
Sources of Liquidity
6 unchanged sentences
The Five-Year Facility Agreement permits borrowings of up to $1.25 billion and expires in May 2026.
−Removed: In the first quarter of fiscal 2021, in light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a short-term draw on the full amount of our Previous Facility on March 19, 2020, which remained outstanding until July 27, 2020, when the Previous Facility was repaid in full.
−Removed: There were no borrowings outstanding under the Five-Year Facility Agreement as of July 31, 2021, or the Previous Facility as of January 30, 2021, and August 1, 2020.
−Removed: Our credit ratings and outlook as of August 27, 2021, are summarized below.
+Added: There were no borrowings outstanding under the Five-Year Facility Agreement as of October 30, 2021, or the Previous Facility as of January 30, 2021, or October 31, 2020.
+Added: Our credit ratings and outlook as of December 1, 2021, are summarized below.
On May 20, 2021, Standard & Poor’s upgraded its rating to BBB+ and confirmed its outlook of Stable.
6 unchanged sentences
Restricted Cash
−Removed: Our liquidity is also affected by restricted cash balances that are primarily restricted to use for workers’ compensation and general liability insurance claims.
−Removed: Restricted cash, which is included in Other current assets on our Condensed Consolidated Balance Sheets, was $134 million, $131 million and $117 million at July 31, 2021, January 30, 2021, and August 1, 2020, respectively.
−Removed: The increase from August 1, 2020, was primarily due to the timing of insurance premium payments.
+Added: Our liquidity is also affected by restricted cash balances that are primarily restricted to use for workers’ compensation and general liability insurance claims, and product protection plans provided under our Totaltech membership offering.
+Added: Restricted cash, which is included in Other current assets on our Condensed Consolidated Balance Sheets, was $173 million, $131 million and $135 million at October 30, 2021, January 30, 2021, and October 31, 2020, respectively.
+Added: The increases from January 30, 2021, and October 31, 2020, were primarily due to the initial funding related to the national launch of our Totaltech membership offering in October 2021.
Debt and Capital
−Removed: As of July 31, 2021, we had $500 million of principal amount of notes due October 1, 2028, and $650 million of principal amount of notes due October 1, 2030.
−Removed: Refer to Note 6, Debt , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, and Note 8, Debt , in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021, for additional information about our outstanding debt.
+Added: As of October 30, 2021, we had $500 million of principal amount of notes due October 1, 2028, and $650 million of principal amount of notes due October 1, 2030.
+Added: Refer to Note 6, Debt , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, and Note 8, Debt , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021, for additional information about our outstanding debt.
Share Repurchases and Dividends
4 unchanged sentences
There is no expiration date governing the period over which we can repurchase shares under this new authorization.
−Removed: As of July 31, 2021, $3.8 billion of the $5.0 billion share repurchase authorization was available.
+Added: As of October 30, 2021, $3.4 billion of the $5.0 billion share repurchase authorization was available.
On August 24, 2021, we announced our plan to repurchase more than $2.5 billion of shares in fiscal 2022.
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
−Removed: July 31, 2021
−Removed: August 1, 2020
−Removed: July 31, 2021
−Removed: August 1, 2020
+Added: Nine Months Ended
+Added: October 30, 2021
+Added: October 31, 2020
+Added: October 30, 2021
+Added: October 31, 2020
Total cost of shares repurchased
1 unchanged sentence
Number of shares repurchased
−Removed: Regular quarterly cash dividends per share
+Added: Regular quarterly cash dividend per share
Cash dividends declared and paid
The total cost of shares repurchased increased in fiscal 2022, primarily due to the temporary suspension of all share repurchases from March to November of fiscal 2021 to conserve liquidity in light of COVID-19-related uncertainties.
−Removed: Cash dividends declared and paid increased in fiscal 2022 primarily due to an increase in the regular quarterly cash dividend per share.
−Removed: Between the end of the second quarter of fiscal 2022 on July 31, 2021, and August 27, 2021, we repurchased an incremental 1.4 million shares of our common stock at a cost of $160 million.
+Added: Cash dividends declared and paid increased in fiscal 2022 primarily due to the increase in the regular quarterly cash dividend per share.
+Added: Between the end of the third quarter of fiscal 2022 on October 30, 2021, and December 1, 2021, we repurchased an incremental 3.6 million shares of our common stock at a cost of $452 million .
Other Financial Measures
−Removed: Our current ratio, calculated as current assets divided by current liabilities, remained relatively unchanged at 1.2 as of July 31, 2021, and January 30, 2021, and 1.1 as of August 1, 2020.
−Removed: Our debt to earnings ratio, calculated as total debt (including current portion) divided by net earnings over the trailing twelve months decreased to 0.5 as of July 31, 2021, compared to 0.8 as of January 30, 2021, and August 1, 2020, primarily due to higher earnings.
+Added: Our current ratio, calculated as current assets divided by current liabilities, remained relatively unchanged at 1.1 as of October 30, 2021, and October 31, 2020, and 1.2 as of January 30, 2021.
+Added: Our debt to earnings ratio, calculated as total debt (including current portion) divided by net earnings over the trailing twelve months decreased to 0.5 as of October 30, 2021, compared to 0.8 as of January 30, 2021, and 1.1 as of October 31, 2020, primarily due to higher earnings.
+Added: The decrease from October 31, 2020, was also due to the retirement of our $650 million principal amount of notes due March 15, 2021, in December 2020.
Off-Balance-Sheet Arrangements and Contractual Obligations
−Removed: Our liquidity is not dependent on the use of off-balance-sheet financing arrangements other than in connection with our $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of July 31, 2021, which, if drawn upon, would be included in either short-term or long-term debt on our Condensed Consolidated Balance Sheets.
+Added: Our liquidity is not dependent on the use of off-balance-sheet financing arrangements other than in connection with our $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of October 30, 2021, which, if drawn upon, would be included in either short-term or long-term debt on our Condensed Consolidated Balance Sheets.
There has been no material change in our contractual obligations other than in the ordinary course of business since the end of fiscal 2021.
1 unchanged sentence
Significant Accounting Policies and Estimates
−Removed: We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
−Removed: We discuss our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
+Added: We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, and our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal 2021.
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Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following:
−Removed: the duration and scope of the COVID-19 pandemic and its resurgence and the impact on demand for our products and services, levels of consumer confidence and our supply chain;
−Removed: macroeconomic pressures in the markets in which we operate (including but not limited to the effects of COVID-19, fluctuations in housing prices, energy markets and jobless rates);
+Added: the duration and scope of the COVID-19 pandemic and its resurgences and the impact on demand for our products and services;
+Added: levels of consumer confidence;
+Added: interruptions and other supply chain issues;
+Added: any material disruption in our relationship with or the services of third-party vendors, risks related to our exclusive brand products and risks associated with vendors that source products outside of the U.S.;
+Added: macroeconomic pressures in the markets in which we operate (including but not limited to the effects of COVID-19, increased levels of inventory loss due to organized crime, petty theft or otherwise, fluctuations in housing prices, energy markets and jobless rates);
future outbreaks, catastrophic events, health crises and pandemics;
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our ability to effectively manage our real estate portfolio;
−Removed: interruptions and other supply chain issues;
−Removed: any material disruption in our relationship with or the services of third-party vendors, risks related to our exclusive brand products and risks associated with vendors that source products outside of the U.S.;
trade restrictions or changes in the costs of imports (including existing or new tariffs or duties and changes in the amount of any such tariffs or duties);
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changes in our credit ratings;
−Removed: and general economic uncertainty in key global markets and worsening of global economic conditions or low levels of economic growth.
+Added: and general economic uncertainty in key global markets and worsening of global
+Added: economic conditions or low levels of economic growth.
We caution that the foregoing list of important factors is not complete.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.