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Item 1. Financial Statements

2025-09-05 compared with 2025-06-06 · 221 added, 109 removed, 290 unchanged (53% of the section changed)

Financial Statements

Condensed Consol idated Balance Sheets

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)

February 1, 2025

August 2, 2025 February 1, 2025 August 3, 2024

Current assets

6 unchanged sentences

Operating lease assets 2,816 2,833 2,860

Goodwill 908 908 1,383

Other assets 606 695 636

Total assets $ 15,253 $ 14,782 $ 15,624

Liabilities and equity

23 unchanged sentences

Accumulated other comprehensive income 313 300 310

Total equity 2,716 2,808 3,107

Total liabilities and equity $ 15,253 $ 14,782 $ 15,624

3 unchanged sentences

$ and shares in millions, except per share amounts (unaudited)

Three Months Ended

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Revenue $ 9,438 $ 9,288 $ 18,205 $ 18,135

Cost of sales 7,244 7,102 13,962 13,885

Gross profit 2,194 2,186 4,243 4,250

Selling, general and administrative expenses 1,829 1,810 3,550 3,547

2 unchanged sentences

Other income (expense):

Loss on disposal of subsidiaries ( 4 ) - ( 4 ) -

Investment income and other 18 21 33 46

Interest expense ( 12 ) ( 13 ) ( 24 ) ( 25 )

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

Earnings before income tax expense and equity in income of affiliates 253 391 475 716

Income tax expense 68 101 87 181

Equity in income (loss) of affiliates

Equity in income of affiliates 1 1 - 2

Net earnings $ 186 $ 291 $ 388 $ 537

Basic earnings per share $ 0.88 $ 1.35 $ 1.83 $ 2.49

1 unchanged sentence

Weighted-average common shares outstanding:

Basic 211.5 216.0 211.8 216.1

Diluted 212.0 217.1 212.5 217.2

See Notes to Condensed Consolidated Financial Statements.

Conde nsed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)

Three Months Ended

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Net earnings $ 186 $ 291 $ 388 $ 537

Foreign currency translation adjustments, net of tax - ( 2 ) 13 ( 7 )

1 unchanged sentence

See Notes to Condensed Consolidated Financial Statements.

Condens ed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)

Three Months Ended

Six Months Ended

August 2, 2025 August 3, 2024

Operating activities

Net earnings $ 388 $ 537

Adjustments to reconcile net earnings to total cash provided by operating activities:

3 unchanged sentences

Deferred income taxes 45 10

Loss on disposal of subsidiaries 4 -

Other, net 4 2

Changes in operating assets and liabilities:

Receivables 123 66

Merchandise inventories ( 717 ) ( 761 )

Other assets ( 24 ) ( 11 )

Accounts payable 693 904

Income taxes ( 167 ) ( 183 )

Other liabilities ( 286 ) ( 266 )

2 unchanged sentences

Additions to property and equipment ( 341 ) ( 335 )

Disposal of subsidiary ( 27 ) -

Other, net ( 1 ) ( 17 )

Total cash used in investing activities ( 369 ) ( 352 )

2 unchanged sentences

Dividends paid ( 403 ) ( 405 )

Other, net ( 6 ) ( 4 )

Total cash used in financing activities ( 574 ) ( 557 )

6 unchanged sentences

$ and shares in millions, except per share amounts (unaudited)

Common Shares

Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Common Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive

Income (Loss) Total

Balances at May 3, 2025 211.3 $ 22 $ - $ 2,428 $ 313 $ 2,763

Net earnings, three months ended August 2, 2025 - - - 186 - 186

Stock-based compensation - - 35 - - 35

Common stock dividends, $ 0.95 per share

- - 4 ( 205 ) - ( 201 )

Repurchase of common stock ( 0.9 ) - ( 39 ) ( 28 ) - ( 67 )

Balances at August 2, 2025 210.4 $ 22 $ - $ 2,381 $ 313 $ 2,716

Balances at February 1, 2025 211.4 $ 22 $ - $ 2,486 $ 300 $ 2,808

Net earnings, three months ended May 3, 2025

Net earnings, six months ended August 2, 2025 - - - 388 - 388

Other comprehensive income:

3 unchanged sentences

Common stock dividends, $ 1.90 per share

- - 10 ( 413 ) - ( 403 )

Repurchase of common stock ( 2.5 ) - ( 87 ) ( 80 ) - ( 167 )

Balances at August 2, 2025 210.4 $ 22 $ - $ 2,381 $ 313 $ 2,716

Balances at May 4, 2024 216.1 $ 22 $ 26 $ 2,722 $ 312 $ 3,082

Net earnings, three months ended August 3, 2024 - - - 291 - 291

Other comprehensive loss:

Foreign currency translation adjustments, net of tax - - - - ( 2 ) ( 2 )

Stock-based compensation - - 36 - - 36

Issuance of common stock - - 1 - - 1

Common stock dividends, $ 0.94 per share

- - 4 ( 207 ) - ( 203 )

Repurchase of common stock ( 1.1 ) - ( 67 ) ( 31 ) - ( 98 )

Balances at August 3, 2024 215.0 $ 22 $ - $ 2,775 $ 310 $ 3,107

Balances at February 3, 2024 215.4 $ 22 $ 31 $ 2,683 $ 317 $ 3,053

Net earnings, three months ended May 4, 2024

Net earnings, six months ended August 3, 2024 - - - 537 - 537

Other comprehensive loss:

3 unchanged sentences

Common stock dividends, $ 1.88 per share

- - 9 ( 414 ) - ( 405 )

Repurchase of common stock ( 1.8 ) - ( 119 ) ( 31 ) - ( 150 )

Balances at May 4, 2024

Balances at August 3, 2024 215.0 $ 22 $ - $ 2,775 $ 310 $ 3,107

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Basis of Presentation

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.

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

and, as applicable, its consolidated subsidiaries.

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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 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.

The first six months of fiscal 2026 and fiscal 2025 each included 26 weeks.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from August 2, 2025, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure.

No such events were identified.

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We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 Form 10-K.

Recently Enacted Tax Legislation

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OB3”).

The OB3 extends key provisions of the 2017 Tax Cuts and Jobs Act, including, but not limited to, domestic research expensing, 100% bonus depreciation on tangible property and modifications to the international tax framework.

The provisions will not have a material impact on our income tax expense.

Supply Chain Financing

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 $ 569 million, $ 398 million and $ 505 million as of May 3, 2025, February 1, 2025, and May 4, 2024, 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 $ 872 million, $ 398 million and $ 729 million as of August 2, 2025, February 1, 2025, and August 3, 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):

February 1, 2025

Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the totals shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions):

August 2, 2025 February 1, 2025 August 3, 2024

Cash and cash equivalents $ 1,456 $ 1,578 $ 1,387

6 unchanged sentences

Restructuring charges were as follows ($ in millions):

Three Months Ended

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Fiscal 2026 Labor and Store Optimization Initiative $ 122 $ - $ 122 $ -

Best Buy Health Optimization and China Sourcing Initiative ( 6 ) - 105 -

1 unchanged sentence

Fiscal 2023 Resource Optimization Initiative - ( 1 ) - ( 2 )

Total $ 114 $ ( 7 ) $ 223 $ 8

Fiscal 2026 Labor and Store Optimization Initiative

In the second quarter of fiscal 2026, we commenced a restructuring initiative intended to align field resources with changing customer behaviors, close select non-traditional store locations and redirect corporate resources for better alignment with our strategy.

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

All charges incurred related to this initiative were from continuing operations 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

Domestic International Total

Termination benefits $ 78 $ 3 $ 81

Asset impairments (1)

Total $ 119 $ 3 $ 122

(1) Represents asset impairments primarily related to planned store closures, including an impairment related to an indefinite-lived tradename.

See Note 3, Goodwill and Intangible Assets , for additional information.

The remaining carrying value of net assets approximates fair value and was immaterial as of August 2, 2025 .

There were no cash payments related to this initiative during the second quarter of fiscal 2026.

Our restructuring accrual liabilities related to termination benefits of $ 81 million as of August 2, 2025, reflect expected future cash payments primarily during fiscal 2026.

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.

These actions included the exit of a component of our Best Buy Health business that was finalized during the second quarter of fiscal 2026.

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

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

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

Three Months Ended Six Months Ended

August 2, 2025 August 2, 2025

Asset impairments and other costs (1)

Termination benefits ( 3 ) 35

Total $ ( 6 ) $ 105

(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 .

The remaining carrying value of net assets approximates fair value and was immaterial as of August 2, 2025 .

Restructuring accrual activity related to this initiative was as follows ($ in millions):

Termination Benefits Asset Impairments and Other Costs Total

Balances at February 1, 2025 $ - $ - $ -

Charges 38 28 66

Cash payments ( 9 ) ( 27 ) ( 36 )

Adjustments (1)

( 3 ) ( 1 ) ( 4 )

Balances at August 2, 2025 $ 26 $ - $ 26

(1) Primarily represents adjustments for termination benefits primarily related to higher-than-expected employee retention from previously planned organizational changes.

Our restructuring accrual liabilities related to termination benefits of $ 26 million as of August 2, 2025, reflect expected future cash payments primarily during fiscal 2026.

Fiscal 2024 Restructuring Initiative

During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to accomplish the following:

(1) align field labor resources with where customers want to shop to optimize the customer experience;

(2) redirect corporate resources for better alignment with our strategy;

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

During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to align field labor resources with where customers want to shop and to optimize the customer experience, redirect corporate resources for better alignment with our strategy and 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

Cumulative Amount

As of May 3, 2025

Three Months Ended Six Months Ended Cumulative Amount as of

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 August 2, 2025

Domestic $ ( 2 ) 7 $ ( 4 ) $ 10 $ 162

International - ( 1 ) - - 8

Total $ ( 2 ) $ 6 $ ( 4 ) $ 10 $ 170

Restructuring accrual activity related to this initiative was as follows ($ in millions):

Termination Benefits

International

Domestic International Total

Balances at February 1, 2025 $ 80 $ 5 $ 85

1 unchanged sentence

Adjustments (1)

Balances at May 3, 2025

( 4 ) - ( 4 )

Balances at August 2, 2025 $ 61 $ 4 $ 65

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

Our restructuring accrual liabilities related to termination benefits of $ 65 million as of August 2, 2025, reflect expected future cash payments primarily during fiscal 2026.

Goodwill and Intangible Assets

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

August 2, 2025 February 1, 2025 August 3, 2024

Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment

Domestic $ 1,450 $ ( 542 ) $ 1,450 $ ( 542 ) $ 1,450 $ ( 67 )

International 608 ( 608 ) 608 ( 608 ) 608 ( 608 )

Total $ 2,058 $ ( 1,150 ) $ 2,058 $ ( 1,150 ) $ 2,058 $ ( 675 )

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

2 unchanged sentences

Refer to Note 2, Restructuring , for additional information.

Indefinite-Lived Intangible Assets

In the second quarter of fiscal 2026, we recorded a full impairment of $ 16 million related to our only remaining indefinite-lived intangible asset as a result of restructuring activity that commenced in the second quarter of fiscal 2026.

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):

February 1, 2025

Gross Carrying

‎ Amortization (1)

August 2, 2025 February 1, 2025 August 3, 2024 Weighted-Average Useful Life Remaining

as of August 2, 2025

Gross Carrying

1 unchanged sentence

Gross Carrying

‎ Amortization

Weighted-Average Useful Life Remaining

‎ as of May 3, 2025 (in years)

Amount Accumulated

Amortization Gross Carrying

Amount Accumulated

Customer relationships $ 339 $ 284 $ 360 $ 285 $ 360 $ 280 8.0

Tradenames 87 78 92 79 92 75 1.2

Developed technology 56 56 64 61 64 60 -

(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.

Total $ 482 $ 418 $ 516 $ 425 $ 516 $ 415 7.0

(1) Gross carrying amount and accumulated amortization as of August 2, 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

Statement of Earnings Location

Amortization expense included in Selling, general and administrative expenses ("SG&A") on our Condensed Consolidated Statements of Earnings was as follows ($ in millions):

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Amortization expense $ 4 $ 5 $ 9 $ 11

Selling, general and administrative expenses

Amortization expense expected to be recognized in future periods is as follows ($ in millions):

1 unchanged sentence

Remainder of fiscal 2026 $ 7

Fiscal 2027 13

Fiscal 2028 8

Fiscal 2029 7

Fiscal 2030 6

Fiscal 2031 5

Thereafter 18

Fair Value Measurements

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Balance Sheet Location (1)

Fair Value Hierarchy

February 1, 2025

Fair Value Hierarchy August 2, 2025 February 1, 2025 August 3, 2024

Money market funds (2)

Cash and cash equivalents

Cash and cash equivalents Level 1 $ 78 $ 439 $ 212

Time deposits (3)

Cash and cash equivalents

Cash and cash equivalents Level 2 258 150 136

Money market funds (2)

Other current assets

Other current assets Level 1 123 140 147

Time deposits (3)

Other current assets

Other current assets Level 2 40 50 51

Marketable securities that fund deferred compensation (4)

Other assets Level 1 40 39 38

Interest rate swap derivative instruments (5)

Long-term liabilities

Long-term liabilities Level 2 - 14 2

(1) Balance sheet location is determined by the length to maturity at date of purchase and whether the assets are restricted for particular use.

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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.

In the second quarter and first six months of fiscal 2026, we recorded asset impairments and other costs as a result of restructuring initiatives that commenced in the first and second quarters of fiscal 2026.

These fair value remeasurements were based on significant unobservable inputs (Level 3).

Refer to Note 2, Restructuring , for additional information.

6 unchanged sentences

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

February 1, 2025

Carrying Value

August 2, 2025 February 1, 2025 August 3, 2024

Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value

Long-term debt (1)

(1) Excludes debt discou nts, issuance costs and finance lease obligations.

$ 1,077 $ 1,150 $ 1,031 $ 1,136 $ 1,058 $ 1,148

(1) Excludes debt discounts, issuance costs and finance lease obligations.

Derivative Instruments

2 unchanged sentences

Our derivative instruments designated as net investment hedges and fair value hedges are recorded on our Condensed Consolidated Balance Sheets at fair value.

The gross fair values of our outstanding derivative instruments and corresponding fair value classifications are included in Note 4, Fair Value Measurements .

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):

Contract Type

February 1, 2025

Contract Type August 2, 2025 February 1, 2025 August 3, 2024

Derivatives designated as net investment hedges $ 119 $ 119 $ 103

1 unchanged sentence

No hedge designation (foreign exchange contracts) 62 42 59

Effects of our derivative instruments on our Condensed Consolidated Statements of Earnings were as follows ($ in millions):

Total $ 681 $ 661 $ 662

Effects of our fair value hedges included in Interest expense on our Condensed Consolidated Statements of Earnings were as follows ($ in millions):

Gain (Loss) Recognized

Three Months Ended

Statement of Earnings Location

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Interest rate swaps $ 9 $ 24 $ 15 $ 9

Interest expense

Adjustments to carrying value of long-term debt ( 9 ) ( 24 ) ( 15 ) ( 9 )

Interest expense

Total $ - $ - $ - $ -

Short-Term Debt

3 unchanged sentences

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.

There were no borrowings outstanding under the Five-Year Facility Agreement as of August 2, 2025, or the Previous Facility as of February 1, 2025, or August 3, 2024.

Long-Term Debt

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

February 1, 2025

August 2, 2025 February 1, 2025 August 3, 2024

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

$ 500 $ 500 $ 500

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

Interest rate swap valuation adjustments - ( 14 ) ( 2 )

Subtotal 1,150 1,136 1,148

Debt discounts and issuance costs ( 6 ) ( 7 ) ( 7 )

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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, unredeemed gift cards and deferred revenue from our private label and co-branded credit card arrangement.

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 were as follows ($ in millions):

February 1, 2025

August 2, 2025 February 1, 2025 August 3, 2024

Receivables, net (1)

$ 486 $ 504 $ 474

Short-term contract liabilities included in:

4 unchanged sentences

Long-term liabilities 213 229 233

(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.

(1) Receivables are recorded net of allowances for expected credit losses of $ 14 million, $ 20 million and $ 16 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

During the first six months of fiscal 2026 and fiscal 2025, $ 853 million and $ 893 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):

Fiscal Year Amount

Remainder of fiscal 2026 $ 17

Fiscal 2027 33

Fiscal 2028 29

Fiscal 2029 26

Fiscal 2030 26

Fiscal 2031 26

Thereafter 89

See Note 11, Segments , for information on our revenue by reportable segment and product category.

2 unchanged sentences

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

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Net earnings $ 186 $ 291 $ 388 $ 537

Weighted-average common shares outstanding 211.5 216.0 211.8 216.1

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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.

The program had $ 3.1 billion remaining available for repurchases as of August 2, 2025.

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

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

Three Months Ended

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Total cost of shares repurchased $ 67 $ 98 $ 167 $ 150

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

Three Months Ended

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Computing and Mobile Phones $ 3,930 $ 3,792 $ 7,722 $ 7,380

Consumer Electronics 2,351 2,478 4,588 4,842

Appliances 1,074 1,177 2,075 2,267

Entertainment 681 498 1,130 1,018

Services 581 590 1,160 1,168

Other 81 88 150 151

Total Domestic revenue $ 8,698 $ 8,623 $ 16,825 $ 16,826

2 unchanged sentences

Consumer Electronics 198 186 371 359

Appliances 80 86 137 146

Entertainment 68 39 110 85

Services 39 38 76 77

Other 9 8 16 16

Total International revenue 740 665 1,380 1,309

Total revenue $ 9,438 $ 9,288 $ 18,205 $ 18,135

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):

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):

Three Months Ended

International

August 2, 2025 August 3, 2024

International Total Domestic (1)

International Total

Revenue $ 8,698 $ 740 $ 9,438 $ 8,623 $ 665 $ 9,288

Cost of sales 6,665 579 7,244 6,596 506 7,102

Adjusted SG&A (2)

1,682 143 1,825 1,663 142 1,805

Adjusted operating income $ 351 $ 18 369 $ 364 $ 17 381

3 unchanged sentences

Other income (expense):

Loss on disposal of subsidiaries ( 4 ) -

Investment income and other 18 21

Interest expense ( 12 ) ( 13 )

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

Earnings before income tax expense and equity in income of affiliates $ 253 $ 391

(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

Six Months Ended

August 2, 2025 August 3, 2024

International Total Domestic (1)

International Total

Revenue $ 16,825 $ 1,380 $ 18,205 $ 16,826 $ 1,309 $ 18,135

Cost of sales 12,884 1,078 13,962 12,882 1,003 13,885

Adjusted SG&A (2)

3,261 280 3,541 3,255 281 3,536

Adjusted operating income $ 680 $ 22 702 $ 689 $ 25 714

Restructuring charges 223 8

Intangible asset amortization 9 11

Operating income 470 695

Other income (expense):

Loss on disposal of subsidiaries ( 4 ) -

Investment income and other 33 46

Interest expense ( 24 ) ( 25 )

Earnings before income tax expense and equity in income of affiliates $ 475 $ 716

(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 expense and cash flow information by segment was as follows ($ in millions):

Three Months Ended Six Months Ended

August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024

Capital expenditures

Domestic $ 161 $ 160 $ 311 $ 298

International 14 23 30 37

1 unchanged sentence

Depreciation and amortization

Domestic $ 201 $ 208 $ 402 $ 417

International 10 10 20 20

Total depreciation and amortization $ 211 $ 218 $ 422 $ 437

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

August 2, 2025 February 1, 2025 August 3, 2024

Domestic $ 13,926 $ 13,567 $ 14,471

International 1,327 1,215 1,153

Total assets $ 15,253 $ 14,782 $ 15,624

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