What changed in this filing

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Item 1. Financial Statements

2025-06-06 compared with 2024-12-06 · 99 added, 148 removed, 300 unchanged (45% of the section changed)

2 unchanged sentences

$ in millions, except per share amounts (unaudited)

November 2, 2024

February 1, 2025

October 28, 2023

Current assets

37 unchanged sentences

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Cost of sales

3 unchanged sentences

Other income (expense):

Gain on sale of subsidiary, net

Investment income and other

Interest expense

Earnings before income tax expense and equity in income of affiliates

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

Income tax expense

Equity in income of affiliates

Equity in income (loss) of affiliates

Basic earnings per share

5 unchanged sentences

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Foreign currency translation adjustments, net of tax

3 unchanged sentences

$ in millions (unaudited)

Nine Months Ended

November 2, 2024

October 28, 2023

Three Months Ended

Operating activities

3 unchanged sentences

Stock-based compensation

Gain on sale of subsidiary, net

Deferred income taxes

Changes in operating assets and liabilities:

5 unchanged sentences

Additions to property and equipment

Net proceeds from sale of subsidiary

Total cash used in investing activities

14 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Balances at August 3, 2024

Net earnings, three months ended November 2, 2024

Other comprehensive loss:

Foreign currency translation adjustments, net of tax

Stock-based compensation

Issuance of common stock

Common stock dividends, $ 0.94 per share

Repurchase of common stock

Balances at November 2, 2024

Balances at February 1, 2025

Net earnings, nine months ended November 2, 2024

Other comprehensive loss:

Foreign currency translation adjustments, net of tax

Stock-based compensation

Issuance of common stock

Common stock dividends, $ 2.82 per share

Repurchase of common stock

Balances at November 2, 2024

Balances at July 29, 2023

Net earnings, three months ended October 28, 2023

Other comprehensive loss:

Net earnings, three months ended May 3, 2025

Other comprehensive income:

Foreign currency translation adjustments, net of tax

3 unchanged sentences

Repurchase of common stock

Balances at October 28, 2023

Balances at January 28, 2023

Net earnings, nine months ended October 28, 2023

Balances at May 3, 2025

Balances at February 3, 2024

Net earnings, three months ended May 4, 2024

Other comprehensive loss:

4 unchanged sentences

Repurchase of common stock

Balances at October 28, 2023

Balances at May 4, 2024

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Basis of Presentation

Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc.

Unless the context otherwise requires, the terms “Best Buy,” “we,” “us”, “our” and the “company” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc.

and, as applicable, its consolidated subsidiaries.

4 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 February 1, 2025.

The first nine months of fiscal 2025 and fiscal 2024 each included 39 weeks.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from November 2, 2024, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure.

The first three months of fiscal 2026 and fiscal 2025 each included 13 weeks.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from May 3, 2025, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure.

No such events were identified.

Sale of Subsidiary

In the second quarter of 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 Condensed Consolidated Statements of Earnings for the nine months ended October 28, 2023.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact of the ASU and expect to include updated segment expense disclosures in our fiscal 2025 Form 10-K.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction.

7 unchanged sentences

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.

Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $ 793 million, $ 426 million and $ 680 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $ 569 million, $ 398 million and $ 505 million as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively.

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):

November 2, 2024

February 1, 2025

October 28, 2023

Cash and cash equivalents

7 unchanged sentences

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Best Buy Health Optimization and China Sourcing Initiative

Fiscal 2024 Restructuring Initiative

Fiscal 2023 Resource Optimization Initiative

Best Buy Health Optimization and China Sourcing Initiative

In the first quarter of fiscal 2026, we commenced a restructuring initiative primarily focused on optimizing our Best Buy Health business by taking actions to maximize value and improve profitability in light of its performance against our original forecasting.

These actions include the decision to exit a component of the business within fiscal 2026.

In addition, we also made significant changes to reduce our exposure to tariffs, particularly in China.

All charges incurred related to this initiative were from continuing operations in our Domestic segment and presented within Restructuring charges on our Condensed Consolidated Statements of Earnings.

The composition of restructuring charges incurred related to this initiative were as follows ($ in millions):

Three Months Ended

Asset impairments and other costs (1)

Termination benefits

(1) Primarily represents the full impairment of net assets related to a component of our Best Buy Health business and other exit costs.

The remaining carrying value of net assets approximates fair value and was immaterial as of May 3, 202 5.

There were no cash payments related to this initiative during the first quarter of fiscal 2026 and our restructuring accrual liabilities as of May 3, 2025, were $ 66 million, reflecting expected future cash payments primarily during fiscal 2026.

We currently do not expect to incur material future restructuring charges related to this initiative .

Fiscal 2024 Restructuring Initiative

3 unchanged sentences

and (3) right-size resources to better align with our revenue outlook for fiscal 2025.

We do not expect to incur material future restructuring charges related to this initiative.

All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Condensed Consolidated Statements of Earnings as follows ($ in millions):

Three Months Ended

Nine Months Ended

Three Months Ended

Cumulative Amount

November 2, 2024

As of November 2, 2024

As of May 3, 2025

International

5 unchanged sentences

Adjustments (1)

Balances at November 2, 2024

Balances at May 3, 2025

(1) Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes.

We do not expect to incur material future restructuring charges related to this initiative.

Fiscal 2023 Resource Optimization Initiative

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.

We recorded reductions to employee termination benefits in the first nine months of fiscal 2025 and fiscal 2024, primarily within our Domestic segment, related to higher-than-expected employee retention.

Cumulative charges incurred related to this initiative as of November 2, 2024, were $ 125 million, comprised of $ 122 million and $ 3 million within our Domestic and International segments, respectively.

We do not expect to incur material future restructuring charges related to this initiative, and no material liability remains as of November 2, 2024.

Goodwill and Intangible Assets

Goodwill balances were as follows as of November 2, 2024, February 3, 2024, and October 28, 2023 ($ in millions):

Goodwill balances by segment were as follows ($ in millions):

February 1, 2025

Gross Carrying Amount

Cumulative Impairment

Gross Carrying Amount

Cumulative Impairment

Gross Carrying Amount

Cumulative Impairment

International

No impairment charges were recorded during the periods presented.

Indefinite-Lived Intangible Assets

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.

The carrying value of the tradename was $ 16 million as of November 2, 2024, and was recorded within Other assets on our Consolidated Balance Sheets.

‎ In fiscal 2025, we recorded a goodwill impairment of $ 475 million within the Domestic segment for the Best Buy Health reporting unit.

The restructuring activity that commenced in the first quarter of fiscal 2026 was a triggering event to evaluate the Best Buy Health reporting unit for impairment.

No further goodwill impairment was identified.

Refer to Note 2, Restructuring , for additional information.

Definite-Lived Intangible Assets

We have definite-lived intangible assets recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions):

November 2, 2024

February 1, 2025

October 28, 2023

Gross Carrying

5 unchanged sentences

Weighted-Average Useful Life Remaining

‎ as of November 2, 2024 (in years)

‎ as of May 3, 2025 (in years)

Customer relationships

Developed technology

(1) Gross carrying amount and accumulated amortization as of May 3, 2025, excludes $ 34 million and $ 16 million, respectively, of definite-lived intangible assets related to the exit of a component of our Best Buy Health business.

See Note 2, Restructuring , for additional information.

Amortization expense was as follows ($ in millions):

Three Months Ended

Nine Months Ended

Statement of Earnings Location

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Amortization expense

13 unchanged sentences

Fair Value Hierarchy

November 2, 2024

February 1, 2025

October 28, 2023

Money market funds (2)

16 unchanged sentences

See Note 5, Derivative Instruments , for additional information.

Nonrecurring Fair Value Measurements

In the first quarter of fiscal 2026, we recorded asset impairments and other costs related to our Best Buy Health Optimization and China Sourcing Initiative.

Refer to Note 2, Restructuring , for additional information.

Fair Value of Financial Instruments

5 unchanged sentences

Long-term debt balances were as follows ($ in millions):

November 2, 2024

February 1, 2025

October 28, 2023

Carrying Value

10 unchanged sentences

Contract Type

November 2, 2024

February 1, 2025

October 28, 2023

Derivatives designated as net investment hedges

4 unchanged sentences

Three Months Ended

Nine Months Ended

Statement of Earnings Location

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Interest rate swaps

4 unchanged sentences

Revolving Credit Facility

We have a $ 1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2028.

There were no borrowings outstanding under the Five-Year Facility Agreement as of November 2, 2024, February 3, 2024, or October 28, 2023.

On April 18, 2025, 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.

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 April 2023 and scheduled to expire April 2028, but was terminated on April 18, 2025.

The Five-Year Facility Agreement permits borrowings of up to $ 1.25 billion and expires in April 2030.

There were no borrowings outstanding under the Five-Year Facility Agreement as of May 3, 2025, or the Previous Facility as of February 1, 2025, or May 4, 2024.

The interest rate under the Five-Year Facility Agreement is variable and is determined at our option as:

(i) the sum of (a) the greatest of (1) U.S.

Bank National Association’s prime rate, (2) the greater of the federal funds effective rate and the overnight bank funding rate plus, in each case, 0.5 %, and (3) Adjusted Term Secured Overnight Financing Rate (the “Adjusted Term SOFR”) for an interest period of one month plus 1 %, and (b) a variable margin rate (the “ABR Margin”);

or (ii) Adjusted Term SOFR for the applicable interest period plus a variable margin rate (the “Term SOFR Margin”).

In addition, a facility fee is assessed on the commitment amount.

The ABR Margin, Term SOFR Margin and the facility fee are based upon our current senior unsecured debt rating.

Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.000 % to 0.015 %, the Term SOFR Margin ranges from 0.565 % to 1.015 %, and the facility fee ranges from 0.060 % to 0.110 %.

The Five-Year Facility Agreement is guaranteed by certain of our subsidiaries and contains customary affirmative and negative covenants.

Among other things, these covenants restrict our and certain of our subsidiaries’ abilities to incur liens on certain assets;

make material changes in corporate structure or the nature of our business;

dispose of material assets;

engage in certain mergers, consolidations and certain other fundamental changes;

or engage in certain transactions with affiliates.

The Five-Year Facility Agreement also contains a covenant that requires the registrant to maintain a maximum quarterly cash flow leverage ratio.

The Five-Year Facility Agreement contains customary default provisions, including, but not limited to, failure to pay interest or principal when due and failure to comply with covenants.

Long-Term Debt

Long-term debt consisted of the following ($ in millions):

November 2, 2024

February 1, 2025

October 28, 2023

Notes, 4.45 %, due October 1, 2028

Notes, 1.95 %, due October 1, 2030

Notes, 4.45 %, due October 1, 2028 ("2028 Notes")

Notes, 1.95 %, due October 1, 2030 ("2030 Notes")

Interest rate swap valuation adjustments

6 unchanged sentences

See Note 4, Fair Value Measurements , for the fair value of long-term debt.

Other than the $ 500 million of principal amount of notes due October 1, 2028, we do no t have any future maturities of long-term debt within the next five fiscal years.

Both the 2028 Notes and the 2030 Notes mature within the next five fiscal years.

We generate substantially all of our revenue from contracts with customers from the sale of products and services.

Contract balances primarily relate 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.

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):

November 2, 2024

February 1, 2025

October 28, 2023

Receivables, net (1)

5 unchanged sentences

Long-term liabilities

(1) Receivables are recorded net of allowances for expected credit losses of $ 16 million, $ 23 million and $ 19 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

During the first nine months of fiscal 2025 and fiscal 2024, $ 1,054 million and $ 1,192 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods.

(1) Receivables are recorded net of allowances for expected credit losses of $ 15 million, $ 20 million and $ 17 million as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively.

During the first three months of fiscal 2026 and fiscal 2025, $ 614 million and $ 642 million 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):

2 unchanged sentences

Earnings per Share

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 potentially dilutive common shares been issued.

Reconciliations of the numerators and denominators of basic and diluted earnings per share were as follows ($ and shares in millions, except per share amounts):

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Weighted-average common shares outstanding

6 unchanged sentences

On February 28, 2022, our Board of Directors approved a $ 5.0 billion share repurchase program.

The program had $ 3.2 billion remaining available for repurchases as of May 3, 2025.

There is no expiration date governing the period over which we can repurchase shares under this authorization .

Information regarding share repurchases was as follows ($ and shares in millions, except per share amounts):

Information regarding the shares we repurchased and retired was as follows ($ and shares in millions, except per share amounts):

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Total cost of shares repurchased

Average price per share

Total number of shares repurchased

As of November 2, 2024, $ 3.5 billion of the $ 5.0 billion share repurchase authorization was available.

Number of shares repurchased and retired

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.

Reportable segment and product category revenue information was as follows ($ in millions):

Segment and category revenue information was as follows ($ in millions):

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Revenue by reportable segment

International

Total revenue

Revenue by product category

Computing and Mobile Phones

7 unchanged sentences

Total International revenue

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):

Total revenue

Adjusted operating income by segment and the reconciliation to consolidated earnings before income tax expense and equity in income (loss) of affiliates were as follows ($ in millions):

Three Months Ended

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

International

Total operating income

International

Cost of sales

Adjusted SG&A (2)

Adjusted operating income

Restructuring charges

Intangible asset amortization

Operating income

Other income (expense):

Gain on sale of subsidiary, net

Investment income and other

Interest expense

Earnings before income tax expense and equity in income of affiliates

Assets by reportable segment were as follows ($ in millions):

November 2, 2024

February 3, 2024

October 28, 2023

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

(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.

(2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions.

Other information by segment was as follows ($ in millions):

Three Months Ended

International

Capital expenditures

International

Total capital expenditures

Depreciation and amortization

International

Total depreciation and amortization

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.

What changed 10-Q

Item 1. Financial Statements