24 unchanged sentences
We have audited the accompanying consolidated balance sheets of Best Buy Co., Inc.
−Removed: and subsidiaries (the "Company") as of February 3, 2024 and January 28, 2023, the related consolidated statements of earnings, comprehensive income, cash flows and changes in shareholders’ equity for each of the three years in the period ended February 3, 2024, and the related notes (collectively referred to as the "financial statements").
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 3, 2024 and January 28, 2023, and the results of its operations and its cash flows for each of the three years in the period ended February 3, 2024, in conformity with accounting principles generally accepted in the United States of America.
+Added: and subsidiaries (the "Company") as of February 1, 2025, and February 3, 2024, the related consolidated statements of earnings, comprehensive income, cash flows and changes in shareholders’ equity for each of the three years in the period ended February 1, 2025, and the related notes (collectively referred to as the "financial statements").
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 1, 2025, and February 3, 2024, and the results of its operations and its cash flows for each of the three fiscal years in the period ended February 1, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 19, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
27 unchanged sentences
We tested the amount of these deferred vendor allowances recorded as a reduction to inventory by developing an expectation for the amount and comparing our expectation to the amount recorded by management.
−Removed: Goodwill – Best Buy Health Reporting Unit — Refer to Note 1 to the financial statements
+Added: Goodwill – Best Buy Health Reporting Unit — Refer to Note 1 and Note 3 to the financial statements
Critical Audit Matter Description
1 unchanged sentence
The goodwill balance was $908 million as of February 1, 2025, of which $416 million was related to the Best Buy Health reporting unit.
−Removed: The Company uses a combination of the discounted cash flow model and market data to estimate the fair value of the Best Buy Health reporting unit.
−Removed: The discounted cash flow model requires management to make subjective estimates and assumptions related to forecasts of cash flows, such as revenue growth rates and margin rates, and estimates of the weighted average cost of capital rate.
+Added: The Company primarily uses a discounted cash flow analysis to estimate the fair value of the Best Buy Health reporting unit.
+Added: The discounted cash flow analysis requires management to make subjective estimates and assumptions related to forecasts of cash flows, such as revenue growth rates and margin rates, and estimates of the weighted average cost of capital rate.
Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.
−Removed: The fair value of the Best Buy Health reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized .
+Added: The Company recorded a goodwill impairment of $475 million related to the Best Buy Health reporting unit in the year ended February 1, 2025.
Given the significant judgments made by management to estimate the fair value of the Best Buy Health reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts of cash flows, such as revenue growth rates and margin rates, and estimates of the weighted average cost of capital rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists .
4 unchanged sentences
We evaluated the reasonableness of management’s revenue forecasts and margin rates by comparing the forecasts to:
−Removed: (1) the Company’s historical revenue growth rates, including, for new products and services, similar existing products and services;
+Added: (1) the Company’s historical revenue growth rates;
(2) internal communications to management and the board of directors;
41 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Current assets
24 unchanged sentences
Long-term operating lease liabilities
−Removed: Long-term liabilities
Long-term debt
+Added: Long-term liabilities
Contingencies and commitments (Note 12)
16 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
January 28, 2023
2 unchanged sentences
Restructuring charges
+Added: Goodwill impairment
Operating income
14 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
January 28, 2023
6 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
January 28, 2023
3 unchanged sentences
Restructuring charges
+Added: Goodwill impairment
Stock-based compensation
1 unchanged sentence
Gain on sale of subsidiary, net
−Removed: Changes in operating assets and liabilities, net of acquired assets and liabilities:
+Added: Changes in operating assets and liabilities:
Merchandise inventories
7 unchanged sentences
Sales of investments
−Removed: Acquisitions, net of cash acquired
Total cash used in investing activities
6 unchanged sentences
Effect of exchange rate changes on cash
−Removed: Decrease in cash, cash equivalents and restricted cash
+Added: Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
9 unchanged sentences
Balances as of January 29, 2022
−Removed: Other comprehensive income:
+Added: Other comprehensive loss:
Foreign currency translation adjustments, net of tax
10 unchanged sentences
Repurchase of common stock
−Removed: Balances as of January 28, 2023
+Added: Balances as of February 3, 2024
Other comprehensive loss:
8 unchanged sentences
Summary of Significant Accounting Policies
−Removed: Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Consolidated Financial Statements refers to Best Buy Co., Inc.
+Added: Unless the context otherwise requires, the terms “Best Buy,” “we,” “us”, “our” and the “company” in these Notes to Consolidated Financial Statements refer to Best Buy Co., Inc.
and, as applicable, its consolidated subsidiaries.
1 unchanged sentence
We are driven by our purpose to enrich lives through technology and our vision to personalize and humanize technology solutions for every stage of life.
−Removed: We accomplish this by leveraging our combination of technology and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes.
+Added: We accomplish this by leveraging our combination of tech expertise and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes.
We have operations in the U.S.
2 unchanged sentences
The Domestic segment is comprised of our operations in all states, districts and territories of the U.S.
−Removed: and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen and Home, TechLiquidators and Yardbird and the domain names bestbuy.com, currenthealth.com, lively.com, techliquidators.com and yardbird.com.
−Removed: Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Mobile and Geek Squad and the domain name bestbuy.ca.
−Removed: In fiscal 2022, we acquired all of the outstanding shares of Current Health Ltd.
−Removed: (“Current Health”) and Two Peaks, LLC d/b/a Yardbird Furniture (“Yardbird”).
−Removed: Refer to Note 2, Acquisitions , for additional information.
+Added: and our Best Buy Health business, and includes the brand names Best Buy, Best Buy Ads, Best Buy Business, Best Buy Essentials, Best Buy Health, Current Health, Geek Squad, Imagine That, Insignia, Lively, My Best Buy, My Best Buy Memberships, Pacific Kitchen and Home, TechLiquidators and Yardbird;
+Added: and the domain names bestbuy.com, currenthealth.com, lively.com, techliquidators.com and yardbird.com.
+Added: Our International segment is comprised of all operations in Canada under the brand names Best Buy, Best Buy Express, Best Buy Mobile, Geek Squad and TechLiquidators and the domain names bestbuy.ca and techliquidators.ca.
+Added: Our Domestic and International segments generate revenue from the sale of products and services within six revenue categories:
+Added: computing and mobile phones, consumer electronics, appliances, entertainment, services and other.
In fiscal 2024, we completed the sale of a Mexico subsidiary subsequent to our exit from operations in Mexico and recognized a $ 21 million gain within Gain on sale of subsidiary, net on our Consolidated Statements of Earnings.
−Removed: Refer to Note 3, Restructuring , for additional information regarding our exit from operations in Mexico.
Basis of Presentation
8 unchanged sentences
Our fiscal year ends on the Saturday nearest the end of January.
−Removed: Fiscal 2024, fiscal 2023 and fiscal 2022 ended February 3, 2024, January 28, 2023, and January 29, 2022, respectively.
−Removed: Unless otherwise noted, references to years in these notes to consolidated financial statements relate to fiscal years, and not calendar years.
−Removed: Fiscal 2024 included 53 weeks with the 53 rd week occurring in the fiscal fourth quarter.
+Added: Fiscal 2025, fiscal 2024 and fiscal 2023 ended on February 1, 2025, February 3, 2024, and January 28, 2023, respectively.
Fiscal 2025 and fiscal 2023 each included 52 weeks.
+Added: Fiscal 2024 included 53 weeks with the 53 rd week occurring in the fiscal fourth quarter.
+Added: Unless otherwise noted, references to years in these notes to consolidated financial statements relate to fiscal years, not calendar years.
Adopted Accounting Pronouncements
−Removed: In the first quarter of fiscal 2024, we adopted the Accounting Standards Update (“ASU”) 2022-04, Supplier Finance Programs (Subtopic 405-50):
−Removed: Disclosure of Supplier Finance Program Obligations .
−Removed: ASU 2022-04 requires entities to disclose the key terms of the supplier finance programs they use in connection with the purchase of goods and services, along with the amount of obligations outstanding at the end of each period.
−Removed: Beginning in fiscal 2025, an annual roll-forward of such obligations is also required.
−Removed: Below are the applicable disclosures as a result of ASU 2022-04.
−Removed: Supply Chain Financing
−Removed: We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution.
−Removed: Under this program, the financial institution agrees to terms with our suppliers, including amounts that are eligible for early payment, the timing of such payments and the discounts.
−Removed: The financial institution then pays the supplier based on the payment terms agreed to.
−Removed: Suppliers’ participation in this program is at their own option.
−Removed: The financial institution can vary discounts offered at their own discretion.
−Removed: Our rights and obligations to our suppliers – which are typically formalized in standardized agreements – are not affected by the existence of the program.
−Removed: Our liability associated with the funded participation in the program, which is included in Accounts payable on our Consolidated Balance Sheets, was $ 426 million and $ 386 million as of February 3, 2024, and January 28, 2023, respectively.
−Removed: New Accounting Pronouncements and Disclosure Rules
−Removed: In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures , which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses.
−Removed: The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.
−Removed: The amendments should be applied retrospectively to all prior periods presented in the financial statements.
−Removed: We are currently evaluating the impact of the ASU and expect to include updated segment expense disclosures in our fiscal 2025 Form 10-K.
+Added: In the fourth quarter of fiscal 2025, we adopted Accounting Standards Update ( “ASU”) 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures , issued by the Financial Accounting Standards Board (“FASB”).
+Added: ASU 2023-07 enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses.
+Added: The amendments were applied retrospectively to all prior periods presented in these financial statements.
+Added: See Note 13, Segment and Geographic Information, for the applicable new disclosures.
+Added: Unadopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
2 unchanged sentences
We are currently evaluating the impact of the ASU and expect to include updated income tax disclosures in our fiscal 2026 Form 10-K.
−Removed: In March 2024, the U.S.
−Removed: Securities and Exchange Commission issued its final climate disclosure rule, which requires the disclosure of Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements, when material.
−Removed: Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025.
−Removed: We are currently evaluating the impact of the new rule and expect to include updated climate-related disclosures in our fiscal 2026 Form 10-K.
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses , which requires disclosure of specific expense categories in the notes to financial statements.
+Added: The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.
+Added: We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 Form 10-K.
Segment Information
3 unchanged sentences
Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer.
−Removed: Our CODM has ultimate responsibility for enterprise decisions, including determining resource allocation for, and monitoring the performance of, the consolidated enterprise, the Domestic reportable segment and the International reportable segment.
−Removed: Business Combinations
−Removed: We account for business combinations under the acquisition method of accounting.
−Removed: This method requires the recording of acquired assets and assumed liabilities at their acquisition date fair values.
−Removed: The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
−Removed: Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction costs related to business combinations are recorded within Selling, general and administrative expenses (“SG&A”) on our Consolidated Statements of Earnings.
+Added: Our segments are primarily based on geographical area and reflect the way in which internally reported financial information is regularly reviewed by the CODM, who has ultimate responsibility for enterprise decisions, including determining resource allocation for, and monitoring the performance of, the consolidated enterprise, the Domestic segment and the International segment.
Cash, Cash Equivalents and Restricted Cash
1 unchanged sentence
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
January 28, 2023
2 unchanged sentences
Total cash, cash equivalents and restricted cash
−Removed: Cash equivalents consist of highly liquid investments with original maturities of three months or less.
−Removed: Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and other self-insurance liabilities.
−Removed: Receivables consist primarily of amounts due from banks for customer credit card and debit card transactions, vendors for various vendor funding programs, mobile phone network operators for device sales and commissions, and online marketplace partnerships.
+Added: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less.
+Added: Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities.
+Added: Receivables consist primarily of amounts due from banks for vendors for various vendor funding programs, customer credit card and debit card transactions, and mobile phone network operators for device sales and commissions.
Receivables are stated at their carrying values, net of a reserve for expected credit losses, which is primarily based on historical collection trends.
−Removed: Our allowances for uncollectible receivables were $ 32 million and $ 30 million as of February 3, 2024, and January 28, 2023, respectively.
+Added: Our allowances for uncollectible receivables were $ 26 million and $ 32 million as of February 1, 2025, and February 3, 2024, respectively.
We had $ 48 million and $ 43 million of write-offs in fiscal 2025 and fiscal 2024, respectively.
4 unchanged sentences
Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within Cost of sales on our Consolidated Statements of Earnings.
−Removed: Our inventory valuation also reflects markdown adjustments for the excess of the cost over the net recovery we expect to realize from the ultimate disposition of inventory, including consideration of any rights we may have to return inventory to vendors for a refund, and establishes a new cost basis.
+Added: Our inventory valuation also reflects markdown adjustments for the excess of cost over the net recovery we expect to realize from the ultimate sale or other disposal of inventory and establish a new cost basis.
+Added: No adjustment is recorded for inventory that we expect to return to our vendors for full credit.
Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdown adjustments or an increase in the newly established cost basis.
2 unchanged sentences
Property and Equipment
−Removed: Property and equipment is recorded at cost.
+Added: Property and equipment is initially recorded at cost.
We depreciate property and equipment to its residual value using the straight-line method over the estimated useful lives of the assets.
3 unchanged sentences
Repairs and maintenance costs are expensed as incurred.
−Removed: Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.
−Removed: Costs associated with the acquisition or development of software for internal use are capitalized and amortized over the expected useful life of the software, generally from two year s to five year s.
−Removed: A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality.
−Removed: Capitalized software is included in Fixtures and equipment on our Consolidated Balance Sheets.
−Removed: Software maintenance and training costs are expensed in the period incurred.
−Removed: The costs of developing software for sale to customers are expensed as incurred until technological feasibility is established, which generally leads to expensing substantially all costs.
−Removed: Costs associated with implementing cloud computing arrangements that are service contracts are capitalized using methodology similar to internal-use software, but are included in Other assets on our Consolidated Balance Sheets.
+Added: Major renewals or replacements that substantially extend the useful life of an asset are capitalized at cost and depreciated over its remaining useful life.
Estimated useful lives by major asset category are as follows (in years):
2 unchanged sentences
Fixtures and equipment
+Added: Capitalized software is included in Fixtures and equipment on our Consolidated Balance Sheets.
+Added: Costs associated with the acquisition or development of software for internal use are capitalized at cost and amortized over the expected useful life of the software, generally from two year s to five year s.
+Added: A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality.
+Added: Software maintenance and training costs are expensed as incurred.
+Added: The costs of developing software for sale to customers are expensed as incurred until technological feasibility is established, which generally leads to expensing substantially all costs.
+Added: Costs associated with implementing cloud-computing arrangements that are service contracts are capitalized using methodology similar to internal-use software, but are included in Other assets on our Consolidated Balance Sheets.
Impairment of Long-Lived Assets
15 unchanged sentences
We have lease agreements that contain both lease and non-lease components.
−Removed: For lease agreements entered into or reassessed after the adoption of Accounting Standard’s Codification 842, Leases , in fiscal 2020, we have elected to combine lease and non-lease components for all classes of assets.
+Added: We have elected to account for these lease agreements with both lease and non-lease components as a single component for all classes of assets.
Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets;
10 unchanged sentences
We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
+Added: Refer to Note 6, Leases , for additional information.
Goodwill and Intangible Assets
3 unchanged sentences
We test for goodwill impairment at the reporting unit level.
−Removed: Reporting units are determined by identifying components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management.
−Removed: We have goodwill in two reporting units – Best Buy Domestic and Best Buy Health – with carrying values of $ 492 million and $ 891 million, respectively, as of February 3, 2024, and January 28, 2023.
−Removed: Our detailed impairment testing involves comparing the fair value of each reporting unit with its carrying value, including goodwill.
−Removed: Fair value reflects the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction and typically requires analysis of discounted cash flows and market data, such as revenue multiples and quoted market prices.
+Added: Reporting units are determined by identifying operating segments (or components thereof) that constitute businesses for which discrete financial information is available and is regularly reviewed by segment management.
+Added: We have goodwill in two reporting units – Best Buy Domestic and Best Buy Health – with carrying values of $ 492 million and $ 416 million, respectively, as of February 1, 2025, and carrying values of $ 492 million and $ 891 million, respectively, as of February 3, 2024.
+Added: In fiscal 2025, we recorded a goodwill impairment related to our Best Buy Health reporting unit.
+Added: Our impairment testing involves a comparison of the fair value of each reporting unit with its carrying value, including goodwill.
+Added: Fair value reflects our estimate of the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction.
+Added: We use a combination of discounted cash flow (“DCF”) analysis and market data, such as revenue multiples and quoted market prices, for observable comparable companies.
+Added: DCF analysis requires detailed forecasts of cash flow drivers, such as revenue growth rates, margin rates and capital investments, and estimates of weighted-average cost of capital rates.
If the fair value of a reporting unit exceeds its carrying value, we conclude that no goodwill impairment has occurred.
2 unchanged sentences
Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value, as appropriate.
−Removed: We amortize our definite-lived intangible assets over the estimated useful lives of the assets.
−Removed: We review these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets might not be recoverable and monitor for the existence of potential impairment indicators throughout the fiscal year.
−Removed: We record an impairment loss for any portion of the carrying value that is not recoverable.
+Added: We amortize definite-lived intangible assets associated with acquisitions over the estimated useful lives of the assets.
+Added: We review these assets for impairment whenever events or circumstances indicate that the carrying value may not be recoverable.
+Added: We monitor the existence of potential impairment indicators throughout the fiscal year and recognize an impairment loss for any portion of the carrying value that is not recoverable.
+Added: The goodwill impairment recorded in the fourth quarter of fiscal 2025 related to our Best Buy Health reporting unit was a triggering event to evaluate Best Buy Health intangible assets for impairment.
+Added: No intangible asset impairments were identified.
+Added: We do not amortize indefinite-lived intangible assets, but test for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate that the carrying value may not be recoverable.
+Added: We utilize the relief from royalty method to determine the fair value of our indefinite-lived intangible asset.
+Added: If the carrying value exceeds its fair value, we recognize an impairment loss in an amount equal to the excess.
+Added: Refer to Note 3, Goodwill and Intangible Assets , for additional information.
Net Investment Hedges
3 unchanged sentences
We limit recognition in net earnings of amounts previously recorded in other comprehensive income to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation.
−Removed: We report the gains and losses, if any, related to the amount excluded from the assessment of hedge effectiveness in net earnings.
−Removed: Interest Rate Swaps
−Removed: We utilize “receive fixed-rate, pay variable-rate” interest rate swaps to mitigate the effect of interest rate fluctuations on our $ 500 million principal amount of notes due October 1, 2028 (“2028 Notes”) .
+Added: We report the gains and losses, if any, related to the amount excluded from the assessment of hedge effectiveness on our Consolidated Statements of Earnings.
+Added: Net cash flows related to our net investment hedges are presented within Investing activities on our Consolidated Statements of Cash Flows.
+Added: Fair Value Hedges
+Added: We utilize “receive fixed-rate, pay variable-rate” interest rate swaps to mitigate the effect of interest rate risk on our $ 500 million principal amount of notes due October 1, 2028 (“2028 Notes”) .
Our interest rate swap contracts are considered perfect hedges because the critical terms and notional amounts match those of our fixed-rate debt being hedged and are, therefore, accounted for as fair value hedges using the shortcut method.
Under the shortcut method, we recognize the change in the fair value of the derivatives with an offsetting change to the carrying value of the debt.
−Removed: Accordingly, there is no impact on our Consolidated Statements of Earnings from the fair value of the derivatives.
+Added: Accordingly, there is no net impact on our Consolidated Statements of Earnings from the fair value of the derivatives.
+Added: Net cash flows related to our fair value hedges are presented within Operating activities on our Consolidated Statements of Cash Flows.
Derivatives Not Designated as Hedging Instruments
2 unchanged sentences
These derivative instruments are not designated in hedging relationships and, therefore, we record gains and losses on these contracts directly to our Consolidated Statements of Earnings.
+Added: Net cash flows related to our derivatives not designated as hedging instruments are presented within Operating activities on our Consolidated Statements of Cash Flows.
+Added: Refer to Note 5, Derivative Instruments , for additional information.
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
11 unchanged sentences
Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.
−Removed: Fair value remeasurements are based on significant unobservable inputs (Level 3).
−Removed: Fixed asset fair values are primarily derived using a discounted cash flow (“DCF”) model to estimate the present value of net cash flows that the asset or asset group was expected to generate.
−Removed: The key inputs to the DCF model generally include our forecasts of net cash generated from investment operations, as well as an appropriate discount rate.
−Removed: Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, goodwill and other intangible assets, which are remeasured when the derived fair value is below carrying value on our Consolidated Balance Sheets.
+Added: Fair value measurements are based on significant unobservable inputs (Level 3).
+Added: Fixed asset fair values are primarily derived using a DCF analysis to estimate the present value of net cash flows that the asset or asset group was expected to generate.
+Added: The key inputs to the DCF analysis generally include our forecasts of net cash generated from investment operations, as well as an appropriate discount rate.
+Added: Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, goodwill and intangible assets, which are remeasured when the derived fair value is below carrying value on our Consolidated Balance Sheets.
For these assets, we do not periodically adjust carrying value to fair value, except in the event of impairment.
−Removed: When we determine that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference is recorded within SG&A and Restructuring charges on our Consolidated Statements of Earnings for non-restructuring and restructuring charges, respectively.
+Added: When we determine that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference is typically recorded within Selling, general and administrative expenses (“SG&A”) or Restructuring charges on our Consolidated Statements of Earnings for non-restructuring and restructuring charges, respectively.
+Added: In fiscal 2025, we recorded a goodwill impairment related to our Best Buy Health reporting unit within Goodwill impairment on our Consolidated Statements of Earnings.
+Added: Refer to Note 3, Goodwill and Intangible Assets , and Note 4, Fair Value Measurements , for additional information.
We are self-insured for certain losses related to workers’ compensation, medical, general liability and auto claims;
2 unchanged sentences
Liabilities associated with these losses include estimates of both claims filed and losses incurred but not yet reported.
−Removed: We utilize valuations provided by qualified, independent third-party actuaries as well as internal insurance and risk expertise.
+Added: We utilize valuations provided by qualified, independent third-party actuaries as well as internal resources with insurance and risk expertise.
Our net self-insured liabilities included on our Consolidated Balance Sheets were as follows ($ in millions):
February 1, 2025
−Removed: January 28, 2023
−Removed: Short-term liabilities
+Added: February 3, 2024
+Added: Accrued compensation and related expenses
+Added: Accrued liabilities
Long-term liabilities
12 unchanged sentences
We include our liability for unrecognized tax benefits, including accrued penalties and interest, in Long-term liabilities on our Consolidated Balance Sheets and in Income tax expense on our Consolidated Statements of Earnings.
+Added: Refer to Note 10, Income Taxes , for additional information.
+Added: Supply Chain Financing
+Added: We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution.
+Added: Under this program, the financial institution agrees to terms with our suppliers, including amounts that are eligible for early payment, the timing of such payments and the discounts.
+Added: The financial institution then pays the supplier based on the payment terms agreed to.
+Added: Suppliers’ participation in this program is at their own option.
+Added: The financial institution can vary discounts offered at their own discretion.
+Added: Our rights and obligations to our suppliers – which are typically formalized in standardized agreements – are not affected by the existence of the program.
+Added: Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Consolidated Balance Sheets, was as follows ($ in millions):
+Added: Supply chain financing liability at beginning of period
+Added: Invoices confirmed during the year
+Added: Confirmed invoices paid during the year
+Added: Supply chain financing liability at end of period
Accrued Liabilities
−Removed: The major components of accrued liabilities are sales tax liabilities, advertising accruals, accrued income taxes, sales return reserves and insurance liabilities.
+Added: The major components of accrued liabilities are sales tax liabilities, advertising accruals, insurance liabilities, sales return reserves and customer deposits.
Long-Term Liabilities
4 unchanged sentences
Results of operations and cash flows are translated using the average exchange rates throughout the periods.
−Removed: The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of shareholders' equity in accumulated other comprehensive income.
+Added: The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of shareholders' equity in Accumulated other comprehensive income on our Consolidated Balance Sheets.
Gains and losses from foreign currency transactions, which are included in SG&A on our Consolidated Statements of Earnings, have not been significant in any period presented.
Revenue Recognition
−Removed: We generate revenue from the sale of products and services, both as a principal and as an agent.
+Added: We generate substantially all of our revenue from contracts with customers from the sale of products and services, both as a principal and as an agent.
Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
14 unchanged sentences
Our service contracts are primarily with retail customers, merchandise vendors (for factory warranty repairs) and extended warranty underwriters.
−Removed: For technical support membership contracts (for example, our Best Buy Total membership offering), we are responsible for providing support services to customers.
+Added: For technical support membership contracts (for example, our My Best Buy Plus ™ or My Best Buy Total ™ memberships), we are responsible for providing support services to customers.
These contracts have terms ranging from one month to one year and typically contain several performance obligations.
1 unchanged sentence
We have determined that our contracts do not include a significant financing component.
−Removed: For performance obligations provided over time, we recognize revenue primarily on a usage basis, an input method of measuring progress over the related contract term.
−Removed: This method is derived by analysis of historical utilization patterns as this depicts when customers use the services and, accordingly, when delivery of the performance obligation occurs.
+Added: For performance obligations provided over the term of the contract, we typically recognize revenue on a usage basis, an input method of measuring progress over the related contract term.
+Added: This method involves the estimation of expected usage patterns, primarily derived from historical information, as this depicts when customers use the services and, accordingly, when delivery of the performance obligation occurs.
There is judgment in, for example, estimating the relative standalone selling price for bundled performance obligations;
17 unchanged sentences
Activation commissions are subject to repayment to the carrier primarily in the event of customer cancellation for specified time periods after the sale.
−Removed: Commission revenue from mobile network carriers is reported net of the expected cancellations, which we estimate based on historical cancellation rates.
+Added: Commission revenue from mobile network carriers is reported net of expected cancellations, which we estimate based on historical cancellation rates.
Credit Card Revenue
We offer promotional financing and credit cards issued by third-party banks that manage and directly extend credit to our customers.
−Removed: Approximately 25 % of Domestic revenue in fiscal 2024, fiscal 2023 and fiscal 2022 was transacted using one of our branded cards.
+Added: Approximately 25 % of Domestic segment revenue in fiscal 2025, fiscal 2024 and fiscal 2023 was transacted using one of our branded cards.
We provide a license to our brand and marketing services, and we facilitate credit applications in our stores and online.
The banks are the sole owners of the accounts receivable generated under the program and, accordingly, we do not hold any customer receivables related to these programs and act as an agent in the financing transactions with customers.
−Removed: We are eligible to receive a profit share from certain of our banking partners based on the annual performance of their corresponding portfolio, and we receive quarterly payments based on forecasts of full-year performance.
+Added: We are eligible to receive a profit share from certain of our banking partners based on the annual performance of their corresponding portfolio.
+Added: We receive profit-share payments quarterly based on forecasts of full-year performance shortly after the end of each program quarter.
This is a form of variable consideration.
We record such profit share as revenue over time using the most likely amount method, which reflects the amount earned each quarter when it is determined that the likelihood of a significant revenue reversal is not probable, which is typically quarterly.
−Removed: Profit-share payments occur quarterly, shortly after the end of each program quarter.
−Removed: Profit-sharing revenue from our credit card arrangement approximated 1.4 %, 1.4 % and 0.9 % of Domestic revenue in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
+Added: Profit-sharing revenue from our credit card arrangement approximated 1.1 %, 1.4 % and 1.4 % of Domestic segment revenue in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Best Buy Gift Cards
7 unchanged sentences
There is judgment in assessing the level at which we group gift cards for analysis of breakage rates, redemption patterns and the ultimate value of gift cards which we do not expect to be redeemed.
−Removed: Gift card breakage income was $ 40 million, $ 59 million and $ 49 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
Sales Incentives
15 unchanged sentences
However, we have significant experience in estimating the amount and timing of redemptions of certificates, based primarily on historical data.
+Added: Refer to Note 9, Revenue , and Note 13, Segment and Geographic Information , for additional information.
Cost of Sales and Selling, General and Administrative Expenses
−Removed: The following tables illustrate the primary costs classified in each major expense category.
+Added: Types of costs classified in each major expense category are as follows:
Cost of Sales
Cost of products sold, including:
−Removed: Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers
−Removed: Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs
Cash discounts on payments to merchandise vendors
−Removed: Physical inventory losses
−Removed: Customer shipping and handling expenses
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs and depreciation
+Added: Customer shipping and handling expenses
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores
+Added: Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers
+Added: Physical inventory losses
+Added: Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs
Cost of services provided, including:
−Removed: Payroll and benefit costs for services employees associated with providing the service
Cost of replacement parts and related freight expenses
+Added: Payroll and benefit costs for services employees associated with providing the service
Selling, General and Administrative Expenses
−Removed: Payroll and benefit costs for retail and corporate employees, including termination benefits incurred as part of normal operations
−Removed: Occupancy and maintenance costs of retail, services and corporate facilities
−Removed: Depreciation and amortization related to retail, services and corporate assets
Advertising costs
−Removed: Vendor allowances that are a reimbursement of specific, incremental and identifiable costs
−Removed: Tender costs, including bank charges and costs associated with credit card and debit card interchange fees
Charitable contributions
−Removed: Outside and outsourced service fees
+Added: Depreciation and amortization related to retail, services and corporate assets
Long-lived asset impairment charges
+Added: Occupancy and maintenance costs of retail, services and corporate facilities
Other administrative costs, such as supplies, travel and lodging
+Added: Outside and outsourced service fees
+Added: Payroll and benefit costs for retail and corporate employees, including termination benefits incurred as part of normal operations
+Added: Tender costs, including bank charges and costs associated with credit and debit card interchange fees
+Added: Vendor allowances that are a reimbursement of specific, incremental and identifiable costs
Vendor Allowances
We receive funds from our merchandise vendors through a variety of programs and arrangements, primarily in the form of purchases-based or sales-based volumes and for product advertising and placement .
−Removed: We recognize allowances based on purchases and sales as a reduction of cost of sales when the associated inventory is sold.
−Removed: Allowances for advertising and placement are recognized as a reduction of cost of sales ratably over the corresponding performance period.
−Removed: Funds that are determined to be a reimbursement of specific, incremental and identifiable costs incurred to sell a vendor’s products are recorded as an offset to the related expense within SG&A on our Consolidated Statements of Earnings when incurred.
+Added: We recognize vendor allowances based on purchases and sales as a reduction of cost of sales when the associated inventory is sold.
+Added: Vendor allowances for advertising and placement are recognized as a reduction of cost of sales ratably over the corresponding performance period.
+Added: Funds that are determined to be a reimbursement of specific, incremental and identifiable costs incurred to sell vendors’ products are recorded as an offset to the related expense within SG&A on our Consolidated Statements of Earnings when incurred.
Advertising Costs
−Removed: Advertising costs, which are included in SG&A on our Consolidated Statements of Earnings, are expensed the first time the advertisement runs and consist primarily of digital advertisements.
−Removed: Advertising expenses were $ 794 million, $ 864 million and $ 915 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
+Added: Advertising costs, which are included in SG&A on our Consolidated Statements of Earnings, primarily consist of digital advertisements.
+Added: Digital advertising costs are generally expensed as incurred, which is typically when customers either view or click through a digital ad.
+Added: Other advertising costs are expensed the first time the advertisement runs, or as broadcast costs are incurred.
+Added: Advertising costs were $ 846 million, $ 794 million and $ 864 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Stock-Based Compensation
−Removed: We recognize stock-based compensation expense for the fair value of our stock-based compensation awards, which is determined based on the closing market price of our stock at the date of grant for time-based and performance-based share awards, and Monte-Carlo simulation for market-based share awards.
−Removed: Compensation expense is recognized on a straight-line basis over the period in which services are required, except for certain performance-based share awards that vest on a graded basis, in which case the expense is front-loaded using the graded-attribution basis.
+Added: We recognize stock-based compensation expense for the fair value of our stock-based compensation awards, which is determined based on the closing market price of our stock at the date of grant for time-based share awards and Monte-Carlo simulation for market-based share awards.
+Added: Compensation expense is recognized on a straight-line basis over the period in which services are required.
Forfeitures are expensed as incurred or upon termination.
+Added: Refer to Note 8, Shareholders’ Equity , for additional information.
+Added: Earnings per Share
+Added: We compute our basic earnings per share based on the weighted-average number of common shares outstanding, and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued as calculated using the treasury stock method.
+Added: Potentially dilutive securities include stock options and non-vested share awards.
+Added: Non-vested market-based share awards and non-vested performance-based share awards, to the extent they exist, are included in the average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.
+Added: Refer to Note 8, Shareholders’ Equity , for additional information.
Comprehensive Income (Loss)
−Removed: Comprehensive income (loss) is computed as net earnings plus certain other items that are recorded directly to shareholders’ equity .
−Removed: Current Health Ltd.
−Removed: In fiscal 2022, we acquired all outstanding shares of Current Health, a care-at-home technology platform, on November 2, 2021, for net cash consideration of $ 389 million.
−Removed: The acquisition resulted in $ 351 million of goodwill that was assigned to our Best Buy Health reporting unit and was deductible for income tax purposes.
−Removed: The acquisition is aligned with our focus in virtual care to enable people in their homes to connect seamlessly with their health care providers and is included in our Domestic reportable segment and Services revenue category.
−Removed: The acquisition was not material to the results of our operations.
−Removed: Two Peaks, LLC d/b/a Yardbird Furniture
−Removed: In fiscal 2022, we acquired all outstanding shares of Yardbird, a direct-to-consumer outdoor furniture company, on November 4, 2021, for net cash consideration of $ 79 million.
−Removed: The acquisition resulted in $ 47 million of goodwill that was assigned to our Best Buy Domestic reporting unit and was deductible for income tax purposes.
−Removed: The acquisition expands our assortment in categories like outdoor livin g and was not material to the results of our operations.
+Added: Comprehensive income (loss) is computed as net earnings plus or minus certain other items that are recorded directly to shareholders’ equity.
Restructuring
3 unchanged sentences
Mexico Exit and Strategic Realignment
−Removed: Fiscal 2020 U.S.
−Removed: Retail Operating Model Changes
−Removed: (1) Includes ($ 6 ) million related to inventory markdowns recorded in Cost of sales on our Consolidated Statements of Earnings in fiscal 2022.
Fiscal 2024 Restructuring Initiative
3 unchanged sentences
and (3) right-size resources to better align with our revenue outlook for fiscal 2025.
−Removed: All charges incurred related to this plan were comprised of employee termination benefits from continuing operations, including $ 163 million and $ 8 million within our Domestic and International segments, respectively, and were presented within Restructuring charges on our Consolidated Statements of Earnings.
−Removed: We currently expect to incur additional charges in fiscal 2025, primarily within our Domestic segment, of approximately $ 10 million to $ 30 million related to this plan.
−Removed: There were no cash payments related to this plan during fiscal 2024 and our termination benefits liability as of February 3, 2024, was $ 171 million, comprised of $ 163 million in our Domestic segment and $ 8 million in our International segment.
−Removed: We expect to pay up to $ 135 million of employee termination benefits during fiscal 2025, with the remainder being paid in fiscal 2026.
−Removed: Fiscal 2023 Resource Optimization Initiative
−Removed: During the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure.
−Removed: We do not expect to incur material future restructuring charges related to this plan.
−Removed: All charges incurred related to this plan were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Consolidated Statements of Earnings as follows ($ in millions):
−Removed: Cumulative Amount as of
+Added: We do not expect to incur material future restructuring charges related to this initiative.
+Added: All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Consolidated Statements of Earnings as follows ($ in millions):
+Added: Cumulative Amount
February 1, 2025
International
−Removed: Restructuring accrual activity related to this plan was as follows ($ in millions):
+Added: Restructuring accrual activity related to this initiative was as follows ($ in millions):
International
Balances as of January 28, 2023
+Added: Balances as of February 3, 2024
Cash payments
Adjustments (1)
+Added: Balances as of February 1, 2025
+Added: (1) Represents adjustments to previously planned organizational changes and higher-than-expected employee retention.
+Added: Fiscal 2023 Resource Optimization Initiative
+Added: During the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure.
+Added: We do not expect to incur material future restructuring charges related to this initiative.
+Added: All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Consolidated Statements of Earnings as follows ($ in millions):
+Added: Cumulative Amount
+Added: February 1, 2025
+Added: International
+Added: Restructuring accrual activity related to this initiative was as follows ($ in millions):
+Added: International
Balances as of January 28, 2023
3 unchanged sentences
(1) Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes.
−Removed: Mexico Exit and Strategic Realignment
−Removed: In the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico and began taking other actions to more broadly align our organizational structure in support of our strategy.
−Removed: Charges incurred in our International segment primarily related to our decision to exit our operations in Mexico.
−Removed: All of our former stores in Mexico were closed as of the end of the first quarter of fiscal 2022.
−Removed: Charges incurred in our Domestic segment primarily related to actions taken to align our organizational structure in support of our strategy.
−Removed: We do not expect to incur material future restructuring charges related to this initiative and no material liability remains as of February 3, 2024.
−Removed: All charges incurred related to this plan were from continuing operations and presented as follows ($ in millions):
−Removed: Cumulative Amount as of
−Removed: February 3, 2024
−Removed: Earnings Location
−Removed: International
−Removed: International
−Removed: Inventory markdowns
−Removed: Cost of sales
−Removed: Asset impairments (1)
−Removed: Restructuring charges
−Removed: Termination benefits
−Removed: Restructuring charges
−Removed: Currency translation adjustment
−Removed: Restructuring charges
−Removed: Restructuring charges
−Removed: (1) Remaining net carrying value of asset impairments approximates fair value and was immaterial as of February 3, 2024.
−Removed: (2) Other charges are primarily comprised of contract termination costs.
−Removed: No material restructuring accrual activity occurred in fiscal 2024 or fiscal 2023 related to this plan.
+Added: No material restructuring accrual activity occurred in fiscal 2025 related to this initiative, and no material liability remains as of February 1, 2025.
Goodwill and Intangible Assets
−Removed: Goodwill balances by reportable segment were as follows ($ in millions):
+Added: Goodwill balances by segment were as follows ($ in millions):
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Gross Carrying Amount
3 unchanged sentences
International
−Removed: No impairment charges were recorded for the periods presented.
+Added: In fiscal 2025, we recorded a goodwill impairment of $ 475 million within the Domestic segment for the Best Buy Health reporting unit.
+Added: The impairment was identified during the fourth quarter as a result of our annual impairment review.
+Added: This coincides with our annual review of performance against financial and strategic goals, and the annual update of our budget and long-range financial projections.
+Added: Fair value for the Best Buy Health reporting unit is estimated primarily based on DCF analysis.
+Added: The impairment primarily arose from downward revisions of our revenue growth rates and margin rates compared to projections used in prior years, as the market has not scaled as we originally forecasted.
+Added: Indefinite-Lived Intangible Assets
+Added: In the second quarter of fiscal 2025, we reclassified our Yardbird tradename from a definite-lived intangible asset to an indefinite-lived intangible asset to better reflect our expectations of the long-term use of the tradename.
+Added: The carrying value of the tradename was $ 16 million as of February 1, 2025, and was recorded within Other assets on our Consolidated Balance Sheets.
Definite-Lived Intangible Assets
1 unchanged sentence
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Weighted-Average
16 unchanged sentences
Recurring Fair Value Measurements
−Removed: Financial assets accounted for at fair value were as follows ($ in millions):
+Added: Financial assets and liabilities accounted for at fair value were as follows ($ in millions):
Fair Value at
1 unchanged sentence
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Money market funds (2)
7 unchanged sentences
Marketable securities that fund deferred compensation (4)
+Added: Interest rate swap derivative instruments (5)
+Added: Long-term liabilities
(1) Balance sheet location is determined by the length to maturity at date of purchase and whether the assets are restricted for particular use.
2 unchanged sentences
(4) Valued using the performance of mutual funds that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis.
+Added: (5) Valued using readily observable market inputs.
+Added: These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market.
+Added: See Note 5, Derivative Instruments , for additional information.
Nonrecurring Fair Value Measurements
−Removed: In fiscal 2022, we recorded asset impairments related to our exit from operations in Mexico.
−Removed: See Note 3, Restructuring , for additional information regarding the charges incurred and the net carrying value of assets remaining.
+Added: In fiscal 2025, we recorded a goodwill impairment related to our Best Buy Health reporting unit.
+Added: Refer to Note 3, Goodwill and Intangible Assets , for additional information.
Fair Value of Financial Instruments
6 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Carrying Value
3 unchanged sentences
Derivative Instruments
−Removed: We manage our economic and transaction exposure to certain risks by using foreign currency forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations and by using interest rate swaps to mitigate the effect of interest rate fluctuations on our 2028 Notes.
+Added: We manage our economic and transaction exposure to certain risks by using foreign currency forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations and by using interest rate swaps to mitigate the effect of interest rate risk on our 2028 Notes.
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: Our derivative instruments designated as net investment hedges and interest rate swaps are recorded on our Consolidated Balance Sheets at fair value.
+Added: Our derivative instruments designated as net investment hedges and fair value hedges are recorded on our Consolidated Balance Sheets at fair value.
See Note 4, Fair Value Measurements , for gross fair values of our outstanding derivative instruments and corresponding fair value classifications.
Notional amounts of our derivative instruments were as follows ($ in millions):
−Removed: Notional Amount
Contract Type
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Derivatives designated as net investment hedges
−Removed: Derivatives designated as interest rate swap contracts
−Removed: No hedging designation (foreign currency forward contracts)
−Removed: Effects of our derivative instruments on our Consolidated Statements of Earnings were as follows ($ in millions):
+Added: Derivatives designated as fair value hedges (interest rate swaps)
+Added: No hedging designation (foreign exchange contracts)
+Added: Effects of our fair value hedges on our Consolidated Statements of Earnings were as follows ($ in millions):
Gain (Loss) Recognized
1 unchanged sentence
Statement of Earnings Location
−Removed: Interest rate swap contracts
+Added: Interest rate swaps
Interest expense
4 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Operating leases
12 unchanged sentences
Total lease liabilities
−Removed: (1) Finance leases were recorded net of accumulated depreciation of $ 54 million and $ 50 million as of February 3, 2024, and January 28, 2023, respectively.
−Removed: Components of our total lease cost were as follows ($ in millions):
+Added: (1) Finance leases were recorded net of accumulated depreciation of $ 54 million and $ 54 million as of February 1, 2025 and February 3, 2024, respectively.
+Added: Costs and cash flow impacts associated with our finance leases were immaterial in the periods presented.
+Added: Components of our total operating lease cost were as follows ($ in millions):
Statement of Earnings Location
1 unchanged sentence
Cost of sales and SG&A (2)
−Removed: Finance lease cost:
−Removed: Depreciation of lease assets
−Removed: Cost of sales and SG&A (2)
−Removed: Interest on lease liabilities
−Removed: Interest expense
Variable lease cost
1 unchanged sentence
Sublease income
−Removed: Total lease cost
+Added: Total operating lease cost
(1) Includes short-term leases, which are immaterial.
(2) Supply chain-related amounts are included in Cost of sales.
−Removed: Other information related to our leases was as follows ($ in millions):
+Added: Other information related to our operating leases was as follows ($ in millions):
Cash paid for amounts included in the measurement of lease liabilities:
−Removed: Operating cash flows from operating leases
−Removed: Operating cash flows from finance leases
−Removed: Financing cash flows from finance leases
+Added: Operating cash flows
Lease assets obtained in exchange for new lease liabilities
−Removed: Operating leases
−Removed: Finance leases
Weighted average remaining lease term (in years)
−Removed: Operating leases
−Removed: Finance leases
Weighted average discount rate
−Removed: Operating leases
−Removed: Finance leases
−Removed: Future lease payments under our non-cancellable leases as of February 3, 2024, were as follows ($ in millions):
+Added: Future lease payments under our non-cancellable operating leases as of February 1, 2025, were as follows ($ in millions):
Operating Leases (1)
−Removed: Finance Leases (1)
Total future undiscounted lease payments
5 unchanged sentences
On April 12, 2023, we entered into a $ 1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks.
−Removed: The Five-Year Facility Agreement replaced the previous $ 1.25 billion senior unsecured revolving credit facility (the “Previous Facility”) with a syndicate of banks, which was entered into in May 2021 and scheduled to expire in May 2026, but was terminated on April 12, 2023.
The Five-Year Facility Agreement permits borrowings of up to $ 1.25 billion and expires in April 2028.
−Removed: There were no borrowings outstanding under the Five-Year Facility Agreement as of February 3, 2024, or the Previous Facility as of January 28, 2023.
+Added: There were no borrowings outstanding under the Five-Year Facility Agreement as of February 1, 2025, or February 3, 2024.
The interest rate under the Five-Year Facility Agreement is variable and, absent certain events of default, is determined at our option as:
11 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Interest rate swap valuation adjustments
2 unchanged sentences
Total long-term debt
−Removed: current portion
+Added: Less current portion
Total long-term debt, less current portion
−Removed: In September 2018, we issued $ 500 million principal amount of notes due October 1, 2028 (the “2028 Notes”).
+Added: In September 2018, we issued $ 500 million of principal amount of notes due October 1, 2028 (the “2028 Notes”).
The 2028 Notes bear interest at a fixed rate of 4.45 % per year, payable semi-annually on April 1 and October 1 of each year, beginning on April 1, 2019.
4 unchanged sentences
The 2028 Notes contain covenants that, among other things, limit our ability to incur debt secured by liens or to enter into sale and lease-back transactions.
−Removed: In October 2020, we issued $ 650 million principal amount of notes due October 1, 2030, (the “2030 Notes”) that bear interest at a fixed rate of 1.95 % per year, payable semi-annually on April 1 and October 1 of each year, beginning on April 1, 2021.
+Added: In October 2020, we issued $ 650 million of principal amount of notes due October 1, 2030, (the “2030 Notes”) that bear interest at a fixed rate of 1.95 % per year, payable semi-annually on April 1 and October 1 of each year, beginning on April 1, 2021.
Net proceeds from the issuance were $ 642 million after underwriting and issuance discounts totaling $ 8 million.
5 unchanged sentences
See Note 4, Fair Value Measurements , for the fair value of long-term debt.
−Removed: Other than our 2028 Notes, we do no t have any future maturities of long-term debt within the next five fiscal years.
+Added: Other than the 2028 Notes, we do no t have any future maturities of long-term debt within the next five fiscal years.
Shareholders’ Equity
13 unchanged sentences
Share awards:
−Removed: Performance-based
Stock options
8 unchanged sentences
Weighted-Average Fair Value per Share
−Removed: Outstanding as of January 28, 2023
+Added: Outstanding as of February 3, 2024
Vested and distributed
Outstanding as of February 1, 2025
−Removed: The total fair value vested and distributed during fiscal 2024, fiscal 2023 and fiscal 2022 was $ 114 million, $ 159 million and $ 194 million, respectively.
−Removed: The actual tax benefits realized for the tax deductions related to vesting in fiscal 2024, fiscal 2023 and fiscal 2022 were $ 24 million, $ 33 million and $ 41 million, respectively.
+Added: Information regardin g the vesting and distribution of time-based share awards was as follows ($ in millions):
+Added: Time-Based Share Awards
+Added: Fair value of awards vested and distributed
+Added: Tax benefits realized for tax deductions related to vesting
As of February 1, 2025, there was $ 133 million of unrecognized compensation expense related to non-vested time-based share awards that we expect to recognize over a weighted-average period of 1.8 years.
6 unchanged sentences
Weighted-Average Fair Value per Share
−Removed: Outstanding as of January 28, 2023
−Removed: Adjustment for performance achievement
Outstanding as of February 3, 2024
−Removed: Distributions of market-based share awards in fiscal 2024 were not significant.
−Removed: The total fair value distributed during fiscal 2023 and fiscal 2022 was $ 18 million and $ 27 million, respectively.
−Removed: The actual tax benefits realized for the tax deductions related to distributions were $ 2 million and $ 3 million in fiscal 2023 and fiscal 2022, respectively.
−Removed: As of February 3, 2024, there was $ 21 million of unrecognized compensation expense related to non-vested market-based share awards that we expect to recognize over a weighted-average period of 1.7 years.
−Removed: Performance-Based Share Awards
−Removed: Performance-based share awards generally vest upon the achievement of company performance goals based upon certain revenue or profitability measures.
−Removed: For revenue-based performance awards, the number of shares of common stock that could be distributed at the end of the incentive period may range from 0 % to 150 % of each share granted (“target”).
−Removed: Shares are granted at 100 % of target.
−Removed: Awards based on profitability measures vest 33 % on each of the three annual anniversary dates following the grant date if the measure of profitability goal has been met.
−Removed: Information on our performance-based share awards was as follows (shares in thousands):
−Removed: Performance-Based Share Awards
−Removed: Weighted-Average Fair Value per Share
−Removed: Outstanding as of January 28, 2023
Adjustment for performance achievement
Outstanding as of February 1, 2025
−Removed: The total fair value distributed during fiscal 2024, fiscal 2023 and fiscal 2022 was $ 15 million, $ 37 million and $ 43 million, respectively.
−Removed: The actual tax benefits realized for the tax deductions related to distributions in fiscal 2024, fiscal 2023 and fiscal 2022 were $ 1 million, $ 3 million and $ 3 million, respectively.
−Removed: As of February 3, 2024, there was less than $ 1 million of unrecognized compensation expense related to non-vested performance-based share awards that we expect to recognize over a weighted-average period of 0.2 years.
−Removed: Stock Options
−Removed: Our outstanding stock options have a 10 -year term and generally vest 33 % on each of the three annual anniversary dates following the grant date.
−Removed: All outstanding stock options were vested and exercisable as of February 3, 2024.
−Removed: Information on our stock options was as follows:
−Removed: Stock Options
−Removed: (in thousands)
−Removed: Weighted-Average
−Removed: Exercise Price
−Removed: Weighted-Average
−Removed: Remaining Contractual Term
−Removed: Intrinsic Value
−Removed: (in millions)
−Removed: Outstanding as of January 28, 2023
−Removed: Outstanding as of February 3, 2024
−Removed: No stock options were granted in the fiscal years presented.
−Removed: The aggregate intrinsic value of our stock options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during fiscal 2024, fiscal 2023 and fiscal 2022 was $ 2 million, $ 6 million and $ 19 million, respectively.
−Removed: As of February 3, 2024, there was no unrecognized compensation expense related to stock options that we expect to recognize.
−Removed: Net cash proceeds from the exercise of stock options were $ 9 million, $ 4 million and $ 18 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
−Removed: Income tax benefits realized from stock option exercises were immaterial for all periods presented.
+Added: Distributions of market-based share awards in fiscal 2025 and fiscal 2024 were not significan t.
+Added: Information regarding the vesting and distribution of market-based share awards in fiscal 2023 was as follows ($ in millions):
+Added: Market-Based Share Awards
+Added: Fair value of awards vested and distributed
+Added: Tax benefits realized for tax deductions related to vesting
+Added: As of February 1, 2025, there was $ 21 million of unrecognized compensation expense related to non-vested market-based share awards that we expect to recognize over a weighted-average period of 1.7 years.
Earnings per Share
−Removed: We compute our basic earnings per share based on the weighted-average number of common shares outstanding, and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued.
−Removed: Potentially dilutive securities include stock options and non-vested share awards.
−Removed: Non-vested market-based share awards and non-vested performance-based share awards are included in the average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.
−Removed: As of February 3, 2024, all outstanding options to purchase common stock were exercisable and in-the-money, with a weighted-average price per share of $ 59.71 .
Reconciliations of the numerators and denominators of basic and diluted earnings per share were as follows ($ and shares in millions, except per share amounts):
6 unchanged sentences
Repurchase of Common Stock
−Removed: On February 28, 2022, our Board approved a $ 5.0 billion share repurchase program, which replaced the $ 5.0 billion share repurchase program authorized on February 16, 2021.
−Removed: The program had $ 3,784 million remaining available for repurchases as of February 3, 2024.
+Added: On February 28, 2022, our Board approved a $ 5.0 billion share repurchase program.
+Added: The program had $ 3.3 billion remaining available for repurchases as of February 1, 2025.
There is no expiration date governing the period over which we can repurchase shares under this authorization.
3 unchanged sentences
Number of shares repurchased and retired
−Removed: We currently expect to spend approximately $ 350 million on share repurchases in fiscal 2025.
We generate substantially all of our revenue from contracts with customers from the sale of products and services.
−Removed: Contract balances primarily consist of receivables and liabilities related to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, deferred revenue from our private label and co-branded credit card arrangement and unredeemed gift cards.
+Added: Contract balances primarily relate to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, unredeemed gift cards and deferred revenue from our private label and co-branded credit card arrangement.
Contract balances were as follows ($ in millions):
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Receivables (1)
5 unchanged sentences
Long-term liabilities
−Removed: (1) Receivables are recorded net of allowances for doubtful accounts of $ 23 million and $ 22 million as of February 3, 2024, and January 28, 2023, respectively.
−Removed: During fiscal 2024 and fiscal 2023, $ 1,283 million and $ 1,346 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 expected credit losses of $ 20 million and $ 23 million as of February 1, 2025, and February 3, 2024, respectively.
+Added: During fiscal 2025 and fiscal 2024, $ 1.1 billion and $ 1.3 billion of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods.
Estimated revenue from our contract liability balances expected to be recognized in future periods if the performance of the contract is expected to have an initial duration of more than one year is as follows ($ in millions):
−Removed: See Note 14, Segment and Geographic Information , for information on our revenue by reportable segment and product category.
+Added: See Note 13, Segment and Geographic Information , for information on our revenue by segment and category.
Reconciliations of the federal statutory income tax rate to income tax expense were as follows ($ in millions):
2 unchanged sentences
Change in unrecognized tax benefits
−Removed: Benefit from foreign operations
+Added: Expense (benefit) from foreign operations
+Added: Goodwill impairments (non-deductible)
Income tax expense
8 unchanged sentences
February 1, 2025
−Removed: January 28, 2023
+Added: February 3, 2024
Deferred revenue
4 unchanged sentences
Loss and credit carryforwards
+Added: Property and equipment
Total deferred tax assets
3 unchanged sentences
Operating lease assets
−Removed: Goodwill and intangibles
+Added: Goodwill and intangible assets
Total deferred tax liabilities
−Removed: Net deferred tax assets (liabilities)
−Removed: Deferred taxes were presented as follows ($ in millions):
−Removed: Balance Sheet Location
−Removed: February 3, 2024
−Removed: January 28, 2023
−Removed: Long-term liabilities
−Removed: Net deferred tax assets (liabilities)
+Added: Net deferred tax assets
+Added: Net deferred tax assets were included in Other assets on our Consolidated Balance Sheets as of February 1, 2025, and February 3, 2024.
As of February 1, 2025, we had deferred tax assets for net operating loss carryforwards from international operations of $ 112 million, of which $ 30 million will expire in various years through 2042 and the remaining amounts have no expiration;
7 unchanged sentences
As of February 1, 2025, a valuation allowance of $ 172 million had been established, of which $ 29 million is against U.S.
−Removed: federal foreign tax credit carryforwards, $ 14 million is against international, federal and state capital loss carryforwards, $ 124 million is against international and state net operating loss carryforwards, $ 1 million is against international and state credit carryforwards, and $ 7 million is against other foreign deferred tax assets.
−Removed: The increase in fiscal 2024 was primarily due to current year loss activity from international net operating loss carryforwards, and the set-up of additional valuation allowances against U.S.
−Removed: federal foreign tax credit and capital loss carryforwards and certain foreign deferred tax assets.
−Removed: These increases were partially offset by disposals and releases relating to certain international net operating loss carryforwards.
+Added: federal foreign tax credit carryforwards;
+Added: $ 13 million is against international, federal and state capital loss carryforwards;
+Added: $ 119 million is against international and state net operating loss carryforwards;
+Added: $ 2 million is against international and state credit carryforwards;
+Added: and $ 9 million is against other foreign deferred tax assets.
+Added: The decrease in fiscal 2025 was primarily due to tax rate changes and releases relating to certain international net operating loss carryforwards, and expirations relating to U.S.
+Added: federal foreign tax credit and state credit carryforwards.
+Added: These decreases were partially offset by the set-up of additional valuation allowances against certain foreign deferred tax assets and state and international net operating loss carryforwards.
Reconciliations of changes in unrecognized tax benefits were as follows ($ in millions):
7 unchanged sentences
(1) Represents multi-jurisdiction, multi-year resolutions of certain discrete tax matters.
−Removed: Unrecognized tax benefits of $ 121 million, $ 141 million and $ 214 million as of February 3, 2024, January 28, 2023, and January 29, 2022, respectively, would favorably impact our effective income tax rate if recognized.
+Added: Unrecognized tax benefits of $ 116 million, $ 121 million and $ 141 million as of February 1, 2025, February 3, 2024, and January 28, 2023, respectively, would favorably impact our effective income tax rate if recognized.
We recognize interest and penalties (not included in the unrecognized tax benefits above), as well as interest received from favorable tax settlements, as components of income tax expense.
−Removed: Interest expense of $ 3 million, interest income of $ 6 million and interest income of $ 20 million was recognized in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
−Removed: As of February 3, 2024, January 28, 2023, and January 29, 2022, we had accrued interest of $ 43 million, $ 42 million and $ 46 million, respectively.
+Added: Interest expense of $ 1 million, interest expense of $ 3 million and interest income of $ 6 million was recognized in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
+Added: As of February 1, 2025, February 3, 2024, and January 28, 2023, we had accrued interest of $ 45 million, $ 43 million and $ 42 million, respectively.
We file a consolidated U.S.
13 unchanged sentences
Participants can contribute up to 50 % of their eligible compensation annually as defined by the plan document, subject to Internal Revenue Service limitations.
−Removed: We match 100 % of the first 3 % of participating employees’ contributions and 50 % of the next 2 %.
+Added: After one year of service, we will match 100 % of the participant’s eligible contributions that do not exceed 3 % of compensation, plus 50 % of eligible contributions that exceed 3 % but do not exceed 5 % of compensation.
Employer contributions vest immediately.
2 unchanged sentences
Amounts contributed and deferred under the plan are invested in options offered under the plan and elected by the participants.
−Removed: The liability for compensation deferred under the plan was $ 24 million and $ 20 million as of February 3, 2024, and January 28, 2023, respectively, and is included in Long-term liabilities on our Consolidated Balance Sheets.
+Added: The liability for compensation deferred under the plan was $ 20 million and $ 24 million as of February 1, 2025, and February 3, 2024, respectively, and is included in Long-term liabilities on our Consolidated Balance Sheets.
See Note 4, Fair Value Measurements , for the fair value of assets held for deferred compensation.
6 unchanged sentences
Segment and Geographic Information
−Removed: Reportable segment and product category revenue information was as follows ($ in millions):
−Removed: Revenue by reportable segment
−Removed: International
−Removed: Total revenue
−Removed: Revenue by product category
+Added: Segment and category revenue information was as follows ($ in millions) :
Computing and Mobile Phones
7 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, as well as asset information by reportable segment, were as follows ($ in millions):
−Removed: Operating income by reportable segment
+Added: Total revenue
+Added: Our CODM regularly reviews a range of financial and non-financial information to evaluate the performance of, and determine resource allocation for, the consolidated enterprise, the Domestic segment and the International segment.
+Added: Adjusted operating income is the primary financial performance measure used by our CODM, which includes revenue and significant expenses – cost of sales and adjusted SG&A.
+Added: Our CODM reviews adjusted operating income and its components via the annual budget and the ongoing monitoring of variances to budget, forecasts and prior periods.
+Added: Adjusted operating income by segment and the reconciliation to consolidated earnings before income tax expense and equity in income of affiliates were as follows ($ in millions):
International
−Removed: Total operating income
+Added: Cost of sales
+Added: Adjusted SG&A (2)
+Added: Adjusted operating income
+Added: Restructuring charges
+Added: Goodwill impairment
+Added: Intangible asset amortization
+Added: Operating income
Other income (expense):
+Added: Investment income and other
+Added: Interest expense
+Added: Earnings before income tax expense and equity in income of affiliates
+Added: (1) Domestic segment adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S.
+Added: (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions.
+Added: International
+Added: Cost of sales
+Added: Adjusted SG&A (2)
+Added: Adjusted operating income
+Added: Restructuring charges
+Added: Intangible asset amortization
+Added: Operating income
+Added: Other income (expense):
Gain on sale of subsidiary, net
2 unchanged sentences
Earnings before income tax expense and equity in income of affiliates
+Added: (1) Domestic segment adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S.
+Added: (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions.
International
+Added: Cost of sales
+Added: Adjusted SG&A (2)
+Added: Adjusted operating income
+Added: Restructuring charges
+Added: Intangible asset amortization
+Added: Operating income
+Added: Other income (expense):
+Added: Investment income and other
+Added: Interest expense
+Added: Earnings before income tax expense and equity in income of affiliates
+Added: (1) Domestic segment adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S.
+Added: (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions.
+Added: Asset information by segment was as follows ($ in millions):
+Added: International
Capital expenditures
1 unchanged sentence
Total capital expenditures
+Added: Depreciation and amortization
International
−Removed: Total depreciation
−Removed: (1) Domestic operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S.
+Added: Total depreciation and amortization
Geographic information was as follows ($ in millions):
5 unchanged sentences
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.