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美国
证券和交易委员会
华盛顿特区 20549
表格
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(标记一) |
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根据1934年证券交易法第13或15(d)条,本季度报告 |
截至季度结束日期的财务报告
或者
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根据1934年证券交易法第13或15(d)条的转型报告 |
过渡期从 到
委托文件编号:001-39866
(根据其章程规定的注册人准确名称)
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(设立或组织的其他管辖区域) |
| (纳税人识别号码) |
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(主要行政办公室地址) |
| (邮政编码) |
(
(注册人电话号码,包括区号)
不适用
(前名称、地址及财政年度,如果自上次报告以来有更改)
在法案第12(b)条的规定下注册的证券:
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每个类别的标题 | 交易标的 | 登记的交易所名称 |
请勾选注册人是否:(1) 在过去12个月内(或在注册人被要求提交此类报告的较短期间内)已提交根据1934年证券交易法第13条或15(d)条款要求提交的所有报告,及(2) 在过去90天内一直遵守此类提交要求。 是否
请勾选注册人是否在过去12个月内(或在注册人被要求提交此类文件的较短期间内)已电子提交根据规则405的互动数据文件(本章节第232.405条)。 是否
请勾选此项,指示注册人是否为大型加速申报人、加速申报人、非加速申报人、小型报告公司或新兴增长公司。有关“大型加速申报人”、“加速申报人”、“小型报告公司”和“新兴增长公司”的定义,请参见《交易法规1.2》条。
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加速审核员 | 非加速申报人 | ||
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小型报告公司 | 新兴成长型企业 |
如果是新兴成长型公司,请通过勾选表示公司选择放弃使用依据《证券交易法》第13(a)节规定提供的任何新的或修改后的财务会计准则的延长过渡期来符合该规定的计划。
请通过勾选方式指明注册人是否为壳公司(如《交易法》第120亿.2条所定义)。 是的否
截至2024年5月17日,申报人共有
百思买公司
截至2024年11月2日的季度10-Q表格
目录目录
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网站和社交媒体披露
我们通过我们的网站向公众披露有关百思买、百思买的产品、内容和服务以及其他项目的信息,以实现信息的广泛、非排他性分发。通过此渠道分发的信息中的一些可能被视为重要信息。我们鼓励投资者和其他人查看我们在下面位置公开的信息。* 此列表可能会不时更新。
有关百思买及其产品、内容和服务的信息,请访问:https://bestbuy.com。
有关投资社区的信息,包括资讯发布、活动和演示以及向SEC提交的文件,请访问: https://investors.bestbuy.com.
有关百思买的最新信息,包括新闻稿,请访问:https://corporate.bestbuy.com/archive/。
* 这些公司网站及其内容不被纳入本季度10-Q表格报告,也不被视为向SEC提交的文件。
第一部分 — 财务信息
项目1。财务报表
精简的综合损益表调整后的资产负债表
以百万美元为单位,除每股金额外(未经审计)
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| 2024年11月2日 |
| 2024年2月3日 |
| 2023年10月28日 | ||||||
资产 |
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流动资产 |
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现金及现金等价物 | $ | |
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应收款项,净额 |
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商品存货 |
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其他流动资产 |
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总流动资产 |
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物业和设备,净值 |
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营业租赁资产 |
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商誉 |
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其他资产 |
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总资产 | $ | |
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负债和股本 |
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流动负债 |
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应付账款 | $ | |
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未兑换的赠品卡负债 |
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递延收入 |
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应计的报酬和相关费用 |
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应计负债 |
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经营租赁负债流动部分 |
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长期债务的流动部分 |
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总流动负债 |
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长期经营租赁负债 |
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长期债务 |
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长期负债 |
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或有事项(注释10) |
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股权 |
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百思买公司股东权益 |
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优先股,$0.0001 |
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普通股,每股面值为 $0.0001; |
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追加实收资本 |
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留存收益 |
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累计其他综合收益 |
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总股本 |
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总负债和权益 | $ | |
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| $ | |
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注意:截至2024年2月3日的合并资产负债表已从经过审核的合并基本报表中简化。
请参见简明合并财务报表的附注.
汇编利润表
美元和以百万为单位的股份,除每股金额外(未经审计)
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| 截至三个月 |
| 截至九个月 | ||||||||||||
| 2024年11月2日 |
| 2023年10月28日 |
| 2024年11月2日 |
| 2023年10月28日 | ||||||||
收入 | $ | |
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销售成本 |
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毛利润 |
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销售、一般和管理费用 |
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重组费用 |
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营业收入 |
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其他收入(费用): |
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出售子公司的收益,净额 |
| - |
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投资收益和其他 |
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利息支出 |
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税前收益和联营公司收益 |
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所得税费用 |
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关联公司股权法下投资收益 |
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净收益 | $ | |
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每股基本收益 | $ | |
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每股摊薄收益 | $ | |
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加权平均流通普通股数量: |
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基本 |
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摊薄 |
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请参阅简明合并财务报表中的说明。
康德经过审计的综合收益基本报表
以百万美元计(未经审计)
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| 截至三个月 |
| 截至九个月 | ||||||||||||
| 2024年11月2日 |
| 2023年10月28日 |
| 2024年11月2日 |
| 2023年10月28日 | ||||||||
净收益 | $ | |
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货币翻译调整,税后净额 |
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综合收益 | $ | |
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| $ | |
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| $ | |
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| $ | |
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请参阅简明合并财务报表中的说明。
浓缩合并现金流量基本报表
百万美元(未经审计)
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| 截至九个月 | ||||||
| 2024年11月2日 |
| 2023年10月28日 | ||||
经营活动 |
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净收益 | $ | |
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调整净收益与经营活动提供的总现金的对账: | |||||||
折旧和摊销 |
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重组费用 |
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基于股票的补偿 |
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出售子公司的收益,净额 |
| - |
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其他,净数 |
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运营资产和负债的变化: |
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应收账款 |
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商品存货 |
| ( |
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其他资产 |
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应付账款 |
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所得税 |
| ( |
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其他负债 |
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经营活动提供的现金总额 |
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投资活动 |
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新增资产和设备 |
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出售子公司的净收益 |
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其他,净数 |
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股东权益简明合并变动表 单位:百万美元及百万股,每股金额为未经审计的信息 |
| ( |
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筹资活动 |
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回购普通股 |
| ( |
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分红派息 |
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其他,净数 |
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筹资活动中使用的总现金 |
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汇率变动对现金及现金等价物的影响 |
| ( |
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现金及现金等价物净减少额 |
| ( |
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期初现金、现金等价物及受限制的现金余额 |
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期末现金、现金等价物和受限制现金 | $ | |
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| $ | |
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请参阅简明合并财务报表中的说明。
未实现损益
$ 和以百万计的分享,除每股金额外(未经审计)
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| 普通股 |
| 普通股 |
| 额外实收资本 |
| 留存收益 |
| 累积其他全面收入(损失) |
| 总计 | ||||||||||||
截至2024年8月3日的余额 |
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| $ | |
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| $ | - |
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| $ | |
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| $ | |
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| $ | |
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截至2024年11月2日的三个月净收益 |
| - |
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| - |
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| - |
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其他全面损失: |
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货币翻译调整,税后净额 |
| - |
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| - |
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| - |
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| - |
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| ( |
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基于股票的补偿 |
| - |
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| - |
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| - |
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| - |
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普通股发行 |
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| - |
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| - |
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| - |
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普通股股息,$ |
| - |
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| - |
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| ( |
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| - |
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| ( |
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回购普通股 |
| ( |
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| - |
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| ( |
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| ( |
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| - |
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| ( |
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截至2024年11月2日的余额 |
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| $ | |
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| $ | - |
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| $ | |
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| $ | |
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2024年2月3日余额 |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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截至2024年11月2日的九个月净收益 |
| - |
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| - |
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| - |
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| - |
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其他全面损失: |
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货币翻译调整,税后净额 |
| - |
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| - |
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| - |
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| - |
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| ( |
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| ( |
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基于股票的补偿 |
| - |
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| - |
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| - |
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| - |
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普通股发行 |
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| - |
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| - |
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| - |
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普通股股息,$ |
| - |
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| - |
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| ( |
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| - |
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| ( |
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回购普通股 |
| ( |
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| - |
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| ( |
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| ( |
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| - |
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| ( |
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截至2024年11月2日的余额 |
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| $ | |
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| $ | - |
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| $ | |
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| $ | |
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截至2023年7月29日的余额 |
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| $ | |
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| $ | - |
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| $ | |
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| $ | |
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| $ | |
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截至2023年10月28日的三个月净收益 |
| - |
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| - |
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| - |
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| - |
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其他全面损失: |
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货币翻译调整,税后净额 |
| - |
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| - |
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| - |
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| - |
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| ( |
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| ( |
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基于股票的补偿 |
| - |
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| - |
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| - |
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| - |
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普通股发行 |
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| - |
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| - |
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| - |
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| |
|
普通股股息,$ |
| - |
|
|
| - |
|
|
| |
|
|
| ( |
|
|
| - |
|
|
| ( |
|
回购普通股 |
| ( |
|
|
| - |
|
|
| ( |
|
|
| ( |
|
|
| - |
|
|
| ( |
|
截至2023年10月28日的余额 |
| |
|
| $ | |
|
| $ | - |
|
| $ | |
|
| $ | |
|
| $ | |
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2023年1月28日余额 |
| |
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
截至2023年10月28日的九个月净收益 |
| - |
|
|
| - |
|
|
| - |
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| |
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| - |
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| |
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其他全面损失: |
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货币翻译调整,税后净额 |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| ( |
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|
| ( |
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基于股票的补偿 |
| - |
|
|
| - |
|
|
| |
|
|
| - |
|
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| - |
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| |
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普通股发行 |
| |
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| - |
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| |
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| - |
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| - |
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| |
|
普通股股息,$ |
| - |
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|
| - |
|
|
| |
|
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| ( |
|
|
| - |
|
|
| ( |
|
回购普通股 |
| ( |
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| - |
|
|
| ( |
|
|
| ( |
|
|
| - |
|
|
| ( |
|
截至2023年10月28日的余额 |
| |
|
| $ | |
|
| $ | - |
|
| $ | |
|
| $ | |
|
| $ | |
|
请参阅简明合并财务报表中的说明。
附注至简明合并财务报表
(未经审计)
除非上下文另有规定,在这些简明综合基本报表的附注中使用“百思买”、“我们”、“我们”和“我们的”等术语是指百思买公司及其合并子公司(如适用)。
管理层认为,伴随的简明综合基本报表包含了根据美国一般公认会计原则(“GAAP”)所规定的公平呈现所需的所有调整。所有调整都由正常的经常性调整组成,除非在这些简明综合基本报表的附注中另有说明。
我们营业收入和利润的很大一部分是在财政第四季度产生的,这一季度包括了假期购物季的大部分。由于我们业务的季节性特征, interim results 并不一定能指示整个财政年度的结果。此季度报告的 interim financial statements 和相关附注应与我们财政年度截至2024年2月3日的年度报告中包含的合并基本报表和相关附注一起阅读。财政2025和2024年的前九个月均包括39周。
在准备伴随的简明综合基本报表时,我们评估了从2024年11月2日到财务报表发布之日的期间是否存在需要确认或披露的重要后续事件。未发现此类事件。
子公司出售
在2024财年的第二季度,我们完成了对墨西哥子公司的出售,此次出售是在我们退出墨西哥业务之后,并在已完成的子公司出售净收益中确认了$
最近发布的会计声明
2023年11月,财务会计准则委员会(“FASB”)发布了会计准则更新(“ASU”)2023-07, 分部报告(主题 280):报告服务部门(主题 280)变更披露方式,通过升级对意义重大的分部费用的披露来改进分部报告披露要求。该准则适用于 2023 年 12 月 15 日之后的财年和 2024 年 12 月 15 日之后的财年间隔期。该准则必须适用于财务报表中呈现的所有期间的追溯。该公司目前正在评估该标准对合并财务报表的影响。这增强了可报告的板块披露要求,主要通过扩大对重大板块费用的披露。修订案适用于在2023年12月15日后开始的财政年度及在2024年12月15日后开始的财政年度的中期。修订案应追溯适用于财务报表中呈现的所有前期。我们目前正在评估ASU的影响,并预计将在2025财政年度的10-k表格中包括更新的板块费用披露。
2023年12月,FASB发布了ASU 2023-09, 《所得税(Topic 740):所得税披露改善》,ASU No. 2023-09。ASU中的修正要求上市公司按年度披露比例调节中的特定类别,以及按司法管辖区分类披露已支付的所得税。该ASU适用于2024年12月15日后开始年度的上市公司,允许提早采纳。我们目前正在评估该标准对我们的合并财务报表和相关披露的影响。这项ASU要求披露符合一定数量阈值的特定类别在收入税率对账中的信息,以及按管辖区细分的已支付的所得税。该ASU可以选择前瞻性或追溯性应用,自2024年12月15日之后开始的年度期间生效,允许提前采用。我们目前正在评估该ASU的影响,并预计将更新的 在我们的2026财年的10-k表格中披露所得税信息。
2024年11月,FASB发布了ASU 2024-03, 损益表—报告综合收入—费用细分披露(子主题220-40):损益表费用的细分该规则要求在基本报表的附注中披露 特定费用类别。修订自2026年12月15日后的财年开始以及自2027年12月15日后的财年内的中期期间生效。我们目前正在评估该ASU的影响,并预计将在我们的2028财年的10-k表格中包括更新的费用披露。
供应链融资
我们与一家独立金融机构有一个供应链融资计划,其中一些供应商有机会提前以折扣获得应付账款的结算,由金融机构促进。我们在该计划中的资金参与相关的负债,主要包括在我们简缩合并资产负债表的应付账款中,金额为$
总现金、现金等价物和受限制现金
我们在简明合并资产负债表中报告的现金、现金及现金等价物和受限现金与在我们的简明合并现金流量表中显示的总额 reconciled 如下(单位:百万美元):
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| 2024年11月2日 |
| 2024年2月3日 |
| 2023年10月28日 | ||||||
现金及现金等价物 | $ | |
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| $ | |
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| $ | |
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在其他流动资产中包含的受限现金 |
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现金、现金等价物和受限制的现金总额 | $ | |
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| $ | |
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| $ | |
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限制现金中的金额主要用于覆盖我们会员服务下提供的产品保护计划和自保险责任。
重分类
重组费用如下(以百万计):
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| 截至三个月 |
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| 截至九个月 | ||||||||||||
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| 2024年11月2日 |
| 2023年10月28日 |
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| 2024年11月2日 |
| 2023年10月28日 | ||||||||
2024财年的重组计划 |
| $ | ( |
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| $ | - |
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| $ | |
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| $ | - |
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2023财年的资源优化计划 |
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| - |
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| - |
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| ( |
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| ( |
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总计 |
| $ | ( |
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| $ | - |
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| $ | |
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| $ | ( |
|
2024财年的重组计划
在2024财年的第四季度,我们开始了一项企业范围的重组计划,旨在实现以下目标: (1) 将现场劳动资源与客户购物的需求对齐,以优化客户体验; (2) 将企业资源重定向,以更好地与我们的策略对齐; (3) 调整资源规模,以更好地与2025财年的营业收入预期对齐。
与此举措相关的所有费用均包括持续运营中的员工解雇福利,并在我们的简明合并收益表中列示为重组费用如下(单位:百万美元):
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| 截至三个月 |
| 截至九个月 |
| 累积金额 | ||||||
| 2024年11月2日 |
| 2024年11月2日 |
| 截至2024年11月2日 | ||||||
国内 | $ | ( |
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| $ | |
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| $ | |
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国际 |
| - |
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| - |
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总计 | $ | ( |
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| $ | |
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| $ | |
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与本计划相关的重组计提活动如下(单位:百万美元):
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| 员工终止福利 | ||||||||||
| 国内 |
| 国际 |
| 总计 | ||||||
2024年2月3日余额 | $ | |
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| $ | |
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| $ | |
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费用 |
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现金支付 |
| ( |
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| ( |
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| ( |
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调整(1) |
| ( |
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| ( |
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| ( |
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截至2024年11月2日的余额 | $ | |
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| $ | |
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| $ | |
|
(1)主要是指由于之前计划的组织变动,员工留任率高于预期而进行的调整。
我们预计不会因这一倡议而产生重大未来重组费用。
2023财年的资源优化计划
在2023财年的第二季度,我们启动了一项企业范围的举措,以更好地将我们的支出与关键战略和运营对齐,并优化我们的成本结构。与该计划相关的所有费用均来自持续运营的员工终止福利,并在我们的简明合并收益表中的重组费用中列示。
截至2024年11月2日,我们在2025财年和2024财年的前九个月中记录了对员工终止福利的减少,主要集中在我们的国内部门,原因是员工留任率高于预期。此项计划截至2024年11月2日所产生的累计费用为$
商誉
截至2024年11月2日、2024年2月3日和2023年10月28日的商誉余额如下(单位:百万美元):
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| 总账面价值 |
| 累计减值 | ||||
国内 | $ | |
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| $ | ( |
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国际 |
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| ( |
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总计 | $ | |
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| $ | ( |
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无限期的无形资产
在2025财年的第二季度,我们将 我们的Yardbird 商标从有限使用期限的无形资产重新分类为无限使用期限的无形资产 以更好地反映我们对该商标长期使用的预期。 截至2024年11月2日,该商标的账面价值为$
明确有限寿命的无形资产
我们在合并财务状况表的其他资产中记录了可确定使用寿命的无形资产,如下所示(单位:百万美元):
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| 2024年11月2日 |
| 2024年2月3日 |
| 2023年10月28日 |
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| ||||||||||||||||||
| 总账面 |
| 累计 |
| 总账面 |
| 累计 |
| 总账面 |
| 累计 |
| 加权平均剩余使用寿命 | ||||||||||||||
客户关系 | $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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商标 |
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开发的科技 |
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总计 | $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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摊销费用如下(单位:百万美元):
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| 截至三个月 |
| 截至九个月 | |||||||||||||
| 收益声明地点 | 2024年11月2日 |
| 2023年10月28日 |
| 2024年11月2日 |
| 2023年10月28日 | ||||||||||
摊销费用 | 销售、一般和管理费用 |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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预计将在未来期间确认的摊销费用如下(百万美元):
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| 摊销费用 | ||
2025财年剩余部分 |
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| $ | |
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在估计的有形资产未来摊销费用至2024年4月30日时,摊销费用总额如下(以千为单位): |
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科技开发、客户关系、知识产权以及其他购买的无形资产按照其预计使用寿命进行摊销,通常采用直线摊销法,期限从 |
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在估计的有形资产未来摊销费用至2024年4月30日时,摊销费用总额如下(以千为单位): |
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科技开发、客户关系、知识产权以及其他购买的无形资产按照其预计使用寿命进行摊销,通常采用直线摊销法,期限从 |
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2030财年 |
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然后 |
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Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data).
Recurring Fair Value Measurements
Financial assets and liabilities accounted for at fair value were as follows ($ in millions):
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| Fair Value as of | ||||||||||
|
| Balance Sheet Location(1) | Fair Value Hierarchy |
| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | |||||||||
Assets |
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Money market funds(2) |
| Cash and cash equivalents | Level 1 |
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| $ | |
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| $ | |
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| $ | |
| ||
Time deposits(3) |
| Cash and cash equivalents | Level 2 |
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Money market funds(2) |
| Other current assets |
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| Level 1 |
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Time deposits(3) |
| Other current assets |
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| Level 2 |
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Marketable securities that fund deferred compensation(4) |
| Other assets |
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| Level 1 |
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Liabilities |
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Interest rate swap derivative instruments(5) | Long-term liabilities |
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| Level 2 |
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(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)Valued at quoted market prices in active markets at period end.
(3)Valued at face value plus accrued interest at period end, which approximates fair value.
(4)Valued using the performance of mutual funds that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis.
(5)Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. See Note 5, Derivative Instruments, for additional information.
Fair Value of Financial Instruments
The fair values of cash, certain restricted cash, receivables, accounts payable and other payables approximated their carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Fair values for other investments held at cost are not readily available, but we estimate that the carrying values for these investments approximate their fair values.
Long-term debt is presented at carrying value on our Condensed Consolidated Balance Sheets. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. Long-term debt balances were as follows ($ in millions):
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| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | ||||||||||||||||||
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| Fair Value |
| Carrying Value |
| Fair Value |
| Carrying Value |
| Fair Value |
| Carrying Value | ||||||||||||
Long-term debt(1) | $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
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| $ | |
|
(1)Excludes debt discounts, issuance costs and finance lease obligations.
We manage our economic and transaction exposure to certain risks by using foreign exchange 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 interest rate risk on our $
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.
Notional amounts of our derivative instruments were as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Type |
|
| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | ||||||
Derivatives designated as net investment hedges |
|
| $ | |
|
| $ | |
|
| $ | |
|
Derivatives designated as fair value hedges (interest rate swaps) |
|
|
| |
|
|
| |
|
|
| |
|
No hedge designation (foreign exchange contracts) |
|
|
| |
|
|
| |
|
|
| |
|
Total |
|
| $ | |
|
| $ | |
|
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of our derivative instruments on our Condensed Consolidated Statements of Earnings were as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain (Loss) Recognized | ||||||||||||||
|
| 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 | Interest expense | $ | ( |
|
| $ | ( |
|
| $ | ( |
|
| $ | ( |
| |||
Adjustments to carrying value of long-term debt | Interest expense |
| |
|
|
| |
|
|
| |
|
|
| |
| |||
Total |
|
|
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Short-Term Debt
U.S. Revolving Credit Facility
We have a $
Long-Term Debt
Long-term debt consisted of the following ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | ||||||
Notes, |
| $ | |
|
| $ | |
|
| $ | |
|
Notes, |
|
| |
|
|
| |
|
|
| |
|
Interest rate swap valuation adjustments |
|
| ( |
|
|
| ( |
|
|
| ( |
|
Subtotal |
|
| |
|
|
| |
|
|
| |
|
Debt discounts and issuance costs |
|
| ( |
|
|
| ( |
|
|
| ( |
|
Finance lease obligations |
|
| |
|
|
| |
|
|
| |
|
Total long-term debt |
|
| |
|
|
| |
|
|
| |
|
Less current portion |
|
| |
|
|
| |
|
|
| |
|
Total long-term debt, less current portion |
| $ | |
|
| $ | |
|
| $ | |
|
Fair Value and Future Maturities
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 were as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | ||||||
Receivables, net(1) | $ | |
|
| $ | |
|
| $ | |
|
Short-term contract liabilities included in: |
|
|
|
|
|
|
|
|
|
|
|
Unredeemed gift card liabilities |
| |
|
|
| |
|
|
| |
|
Deferred revenue |
| |
|
|
| |
|
|
| |
|
Accrued liabilities |
| |
|
|
| |
|
|
| |
|
Long-term contract liabilities included in: |
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
| |
|
|
| |
|
|
| |
|
(1)Receivables are recorded net of allowances for expected credit losses of $
During the first nine months of fiscal 2025 and fiscal 2024, $
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 |
|
|
|
|
| $ | |
| |
|
|
|
|
| |
| |
|
|
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| |
| |
|
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| |
| |
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| |
| |
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| |
| |
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| |
|
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):
|
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|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings | $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
| |
|
|
| |
|
|
| |
|
|
| |
|
Dilutive effect of stock compensation plan awards |
| |
|
|
| |
|
|
| |
|
|
| |
|
Weighted-average common shares outstanding, assuming dilution |
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential shares which were anti-dilutive and excluded from weighted-average share computations | - |
|
|
| |
|
|
| - |
|
|
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share | $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
Diluted earnings per share | $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
On February 28, 2022, our Board of Directors approved a $
Information regarding share repurchases 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 |
| |
|
|
| |
|
|
| |
|
|
| |
|
We are involved in a number of legal proceedings. Where appropriate, we have made accruals with respect to these matters, which are reflected on our Condensed Consolidated Financial Statements. However, there are cases where liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. 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):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
|
|
|
|
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Revenue by reportable segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
International |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Total revenue |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
Revenue by product category |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computing and Mobile Phones |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
Consumer Electronics |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Appliances |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Entertainment |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Services |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Other |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Total Domestic revenue |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computing and Mobile Phones |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
Consumer Electronics |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Appliances |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Entertainment |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Services |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Other |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
|
|
|
|
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Domestic |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
| $ | |
|
International |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
Total 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 | ||||||
Domestic |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
International |
|
|
|
|
| |
|
|
| |
|
|
| |
|
Total assets |
|
|
|
| $ | |
|
| $ | |
|
| $ | |
|
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” refers to Best Buy Co., Inc. and its consolidated subsidiaries. Any references to our website addresses do not constitute incorporation by reference of the information contained on the websites.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Unless otherwise noted, transactions and other factors significantly impacting our financial condition, results of operations and liquidity are discussed in order of magnitude. Our MD&A should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 (including the information presented therein under Risk Factors), as well as our other reports on Forms 10-Q and 8-K and other publicly available information. All amounts herein are unaudited.
Overview
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. 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.
We have two reportable segments: Domestic and International. The Domestic segment is comprised of our operations in all states, districts and territories of the U.S. and our Best Buy Health business. The International segment is comprised of all our operations in Canada.
Our fiscal year ends on the Saturday nearest the end of January. Our business, like that of many retailers, is seasonal. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season.
Comparable Sales
Throughout this MD&A, we refer to comparable sales. Comparable sales is a metric used by management to evaluate the performance of our existing stores, websites and call centers by measuring the change in net sales for a particular period over the comparable prior period of equivalent length. Comparable sales includes revenue from stores, websites and call centers operating for at least 14 full months. Revenue from online sales is included in comparable sales and represents sales initiated on a website or app, regardless of whether customers choose to pick up product in store, curbside, at an alternative pick-up location or take delivery direct to their homes. Revenue from acquisitions is included in comparable sales beginning with the first full quarter following the first anniversary of the date of the acquisition. Comparable sales also includes credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable. Revenue from stores closed more than 14 days, including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters, is excluded from comparable sales until at least 14 full months after reopening. Comparable sales excludes the impact of certain periodic warranty-related profit-share revenue, the effect of fluctuations in foreign currency exchange rates (applicable to our International segment only) and the impact of the 53rd week (applicable in 53-week fiscal years only). Comparable sales is based on our fiscal calendar and is not adjusted to align calendar weeks. All periods presented apply this methodology consistently.
Consistent with our comparable sales policy, revenue from Best Buy Express locations rebranded as a result of our previously announced collaboration with Bell Canada is excluded from our comparable sales calculation until locations have been operating for at least 14 full months.
We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores, websites and call centers versus the portion resulting from opening new stores or closing existing stores. The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as other retailers’ methods.
Non-GAAP Financial Measures
This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), as well as certain adjusted or non-GAAP financial measures, such as non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted earnings per share (“EPS”). We believe that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, provide additional useful information for evaluating current period performance and assessing future performance. For these reasons, internal management reporting, including budgets, forecasts and financial targets used for short-term incentives are based on non-GAAP financial measures. Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill and intangible asset impairments, price-fixing settlements, gains and losses on sales of subsidiaries and certain investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items. In addition, certain other items may be excluded from non-GAAP financial measures when we believe doing so provides greater clarity to management and our investors. We provide reconciliations of the most comparable financial measures presented in accordance with GAAP to presented non-GAAP financial measures that enable investors to understand the adjustments made in arriving at the non-GAAP financial measures and to evaluate performance using the same metrics as management. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Non-GAAP financial measures may be calculated differently from similarly titled measures used by other companies, thereby limiting their usefulness for comparative purposes.
In our discussions of the operating results of our consolidated business and our International segment, we sometimes refer to the impact of changes in foreign currency exchange rates or the impact of foreign currency exchange rate fluctuations, which are references to the differences between the foreign currency exchange rates we use to convert the International segment’s operating results from local currencies into U.S. dollars for reporting purposes. We also may use the term “constant currency,” which represents results adjusted to exclude foreign currency impacts. We calculate those impacts as the difference between the current period results translated using the current period currency exchange rates and using the comparable prior period currency exchange rates. We believe the disclosure of revenue changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates.
Refer to the Non-GAAP Financial Measures section below for detailed reconciliations of items impacting non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted EPS in the presented periods.
Business Strategy Update
In the third quarter of fiscal 2025, we continued to manage our profitability through strong execution despite revenue declines. We made progress on our fiscal 2025 priorities, grew our paid membership base and drove improvements in our prioritized customer experiences. We continued to deliver sales growth in our Domestic computing and tablet categories as our market position, expert sales associates and compelling merchandising allowed us to capitalize on demand driven by our customers’ desire to replace or upgrade their products combined with new innovation.
We also continue to focus on the following four priorities: (1) invigorate and progress targeted customer experiences; (2) drive operational effectiveness and efficiency; (3) continue our disciplined approach to capital allocation; and (4) explore, pilot and drive incremental revenue streams.
This year, we have been focused on improving and refreshing our App and small view experiences – including enhanced personalization, new features like digital wallet, deal alerts and gift finders, along with a more stream-lined checkout process and faster content loading times. We have grown both customer ratings for our App and growth in active users. We believe this is an important way to engage our customers on their entire shopping journey, and our data shows that customers who use our App frequent us more often and thus spend more.
In our stores, we are making enhancements to every store in the chain in some fashion this year, improving both our merchandising and ease of shopping for customers. This includes working with many of our vendors to implement new and enhanced in-store experiences across the store. To continue to elevate the expert service we provide customers, we have added fully dedicated labor expertise to our in-store computing and have begun the process of doing so in our home theater and major appliances departments in hundreds of stores. These changes are in addition to the actions taken throughout the past year to streamline our leadership model, allowing us to invest in more customer-facing sales associate hours in our stores.
While we elevate our customer experiences, we are simultaneously executing on our longstanding commitment to drive operational effectiveness and efficiencies and identify cost reductions, as this is paramount to help offset inflationary pressures in our business and fund investment capacity. For example, in fiscal 2025 we are focused on driving further efficiencies across our forward and reverse supply chain, our Geek Squad repair operations and our customer care experience. We will continue to lean heavily on analytics and technology to achieve these efficiencies.
Our third key priority for the year is to continue our disciplined approach to capital allocation. This includes striking the appropriate balance of prioritizing areas that best position us for the future, while prudently dealing with the near-term uncertainty in the consumer electronics industry.
Our fourth key priority for fiscal 2025 is longer-term in focus. We will continue to explore opportunities that leverage our scale and capabilities to drive incremental profitable revenue streams over time.
As we look to the rest of the year, we are excited for the holiday season in this still uncertain consumer electronics industry. We are well positioned with compelling deals, inspirational in-store and digital merchandising and competitive fulfillment options. We are the largest consumer electronics specialty retailer with what we believe to be a unique range of product assortment and expert services to help humanize tech, especially new innovation, for every stage of our customers’ lives. We intend to strengthen our position in key categories like computing, home theater and major appliances through our differentiated experiences, pointed marketing spend and competitive pricing.
Results of Operations
Consolidated Results
Selected consolidated financial data was as follows ($ in millions, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Revenue | $ | 9,445 |
|
| $ | 9,756 |
|
| $ | 27,580 |
|
| $ | 28,806 |
|
Revenue % change |
| (3.2) | % |
|
| (7.8) | % |
|
| (4.3) | % |
|
| (8.7) | % |
Comparable sales % change |
| (2.9) | % |
|
| (6.9) | % |
|
| (3.7) | % |
|
| (7.8) | % |
Gross profit | $ | 2,217 |
|
| $ | 2,232 |
|
| $ | 6,467 |
|
| $ | 6,602 |
|
Gross profit as a % of revenue(1) |
| 23.5 | % |
|
| 22.9 | % |
|
| 23.4 | % |
|
| 22.9 | % |
Selling, general and administrative expense ("SG&A") | $ | 1,871 |
|
| $ | 1,878 |
|
| $ | 5,418 |
|
| $ | 5,605 |
|
SG&A as a % of revenue(1) |
| 19.8 | % |
|
| 19.2 | % |
|
| 19.6 | % |
|
| 19.5 | % |
Restructuring charges | $ | (4) |
|
| $ | - |
|
| $ | 4 |
|
| $ | (16) |
|
Operating income | $ | 350 |
|
| $ | 354 |
|
| $ | 1,045 |
|
| $ | 1,013 |
|
Operating income as a % of revenue |
| 3.7 | % |
|
| 3.6 | % |
|
| 3.8 | % |
|
| 3.5 | % |
Net earnings | $ | 273 |
|
| $ | 263 |
|
| $ | 810 |
|
| $ | 781 |
|
Diluted earnings per share | $ | 1.26 |
|
| $ | 1.21 |
|
| $ | 3.73 |
|
| $ | 3.57 |
|
(1)Because retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers’ corresponding rates. For additional information regarding costs classified in cost of sales and SG&A, refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.
In the third quarter and first nine months of fiscal 2025, we generated $9.4 billion and $27.6 billion in revenue, respectively, and our comparable sales declined 2.9% and 3.7%, respectively, as we continued to operate in a challenged consumer electronics industry and experienced softer customer demand. While our comparable sales declined in the third quarter of fiscal 2025 in categories such as appliances, home theater and gaming, we grew comparable sales in our computing, tablet and services categories.
Revenue, gross profit rate, SG&A and operating income rate changes in the third quarter and first nine months of fiscal 2025 were primarily driven by our Domestic segment. For further discussion of our Domestic and International segments, see Segment Performance Summary, below.
Store Summary
Stores open by reportable segment were as follows:
|
|
|
|
|
|
|
|
| November 2, 2024 |
| October 28, 2023 | ||||
Best Buy |
| 889 |
|
|
| 901 |
|
Outlet Centers |
| 25 |
|
|
| 21 |
|
Pacific Sales |
| 20 |
|
|
| 20 |
|
Yardbird |
| 23 |
|
|
| 21 |
|
Total Domestic stores |
| 957 |
|
|
| 963 |
|
Canada Best Buy stores |
| 129 |
|
|
| 128 |
|
Canada Best Buy Mobile stand-alone stores |
| 31 |
|
|
| 32 |
|
Total International stores |
| 160 |
|
|
| 160 |
|
Total stores |
| 1,117 |
|
|
| 1,123 |
|
We continuously monitor store performance as part of a market-driven, omnichannel strategy. As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open. In fiscal 2025, we currently expect to reduce our Domestic Best Buy store count by approximately 10 to 12 stores.
Earlier this year, we announced our collaboration with Bell Canada to rebrand 167 of its stores to Best Buy Express. These stores, previously part of The Source, a wholly owned subsidiary of Bell Canada, are leased by Bell Canada. Under the arrangement, we provide the curated consumer electronics assortment and Geek Squad services, as well as supply chain, marketing and e-commerce. Bell Canada is the exclusive telecommunications services provider and is also responsible for the store operations. As of November 2, 2024, nearly all of the 167 stores have been rebranded.
Income Tax Expense
Income tax expense was relatively unchanged in the third quarter of fiscal 2025. Our effective tax rate (“ETR”) decreased to 23.9% in the third quarter of fiscal 2025 compared to 24.7% in the third quarter of fiscal 2024, primarily due to increased tax benefits from green energy incentives.
Income tax expense increased in the first nine months of fiscal 2025, primarily due to an increase in pre-tax earnings. Our ETR remained unchanged at 24.8% in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024, primarily due to increased tax benefits from green energy incentives, offset by reduced tax benefits from the resolution of tax matters and stock-based compensation.
Our tax provision for interim periods is determined using an estimate of our annual ETR, adjusted for discrete items, if any, that are taken into account in the relevant period. We update our estimate of the annual ETR each quarter and we make a cumulative adjustment if our estimated tax rate changes. Our quarterly tax provision and our quarterly estimate of our annual ETR are subject to variation due to several factors, including our ability to accurately forecast our pre-tax and taxable income and loss by jurisdiction, tax audit developments, recognition of excess tax benefits or deficiencies related to stock-based compensation, foreign currency gains (losses), changes in laws or regulations, and expenses or losses for which tax benefits are not recognized. Our ETR can be more or less volatile based on the amount of pre-tax earnings. For example, the impact of discrete items and non-deductible losses on our ETR is greater when our pre-tax earnings are lower.
Segment Performance Summary
Domestic Segment
Selected financial data for the Domestic segment was as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Revenue | $ | 8,697 |
|
| $ | 8,996 |
|
| $ | 25,523 |
|
| $ | 26,687 |
|
Revenue % change |
| (3.3) | % |
|
| (8.2) | % |
|
| (4.4) | % |
|
| (8.8) | % |
Comparable sales % change(1) |
| (2.8) | % |
|
| (7.3) | % |
|
| (3.8) | % |
|
| (8.0) | % |
Gross profit | $ | 2,049 |
|
| $ | 2,064 |
|
| $ | 5,993 |
|
| $ | 6,108 |
|
Gross profit as a % of revenue |
| 23.6 | % |
|
| 22.9 | % |
|
| 23.5 | % |
|
| 22.9 | % |
SG&A | $ | 1,716 |
|
| $ | 1,727 |
|
| $ | 4,982 |
|
| $ | 5,167 |
|
SG&A as a % of revenue |
| 19.7 | % |
|
| 19.2 | % |
|
| 19.5 | % |
|
| 19.4 | % |
Restructuring charges | $ | (4) |
|
| $ | 1 |
|
| $ | 4 |
|
| $ | (14) |
|
Operating income | $ | 337 |
|
| $ | 336 |
|
| $ | 1,007 |
|
| $ | 955 |
|
Operating income as a % of revenue |
| 3.9 | % |
|
| 3.7 | % |
|
| 3.9 | % |
|
| 3.6 | % |
Selected Online Revenue Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total online revenue | $ | 2,727 |
|
| $ | 2,754 |
|
| $ | 7,970 |
|
| $ | 8,205 |
|
Online revenue as a % of total segment revenue |
| 31.4 | % |
|
| 30.6 | % |
|
| 31.2 | % |
|
| 30.7 | % |
Comparable online sales % change(1) |
| (1.0) | % |
|
| (9.3) | % |
|
| (2.9) | % |
|
| (9.5) | % |
(1)Comparable online sales are included in the comparable sales calculation.
Domestic revenue decreased in the third quarter and first nine months of fiscal 2025, primarily driven by comparable sales declines in the appliances, home theater and gaming categories, partially offset by comparable sales growth in the computing, tablets and services categories. Online revenue of $2.7 billion and $8.0 billion in the third quarter and first nine months of fiscal 2025 decreased 1.0% and 2.9%, respectively, on a comparable basis.
Domestic segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Mix |
|
|
| Comparable Sales |
| ||||||||
|
| Three Months Ended |
|
|
| Three Months Ended |
| ||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Computing and Mobile Phones |
| 47 | % |
|
| 44 | % |
|
| 3.8 | % |
|
| (8.3) | % |
Consumer Electronics |
| 28 | % |
|
| 29 | % |
|
| (5.8) | % |
|
| (9.5) | % |
Appliances |
| 12 | % |
|
| 14 | % |
|
| (14.7) | % |
|
| (15.1) | % |
Entertainment |
| 5 | % |
|
| 6 | % |
|
| (18.8) | % |
|
| 20.6 | % |
Services |
| 7 | % |
|
| 6 | % |
|
| 6.0 | % |
|
| 6.9 | % |
Other |
| 1 | % |
|
| 1 | % |
|
| 12.9 | % |
|
| 4.7 | % |
Total |
| 100 | % |
|
| 100 | % |
|
| (2.8) | % |
|
| (7.3) | % |
Notable comparable sales changes by revenue category were as follows:
Computing and Mobile Phones: The 3.8% comparable sales growth was driven primarily by computing and tablets.
Consumer Electronics: The 5.8% comparable sales decline was driven primarily by home theater.
Appliances: The 14.7% comparable sales decline was driven primarily by large appliances.
Entertainment: The 18.8% comparable sales decline was driven primarily by gaming.
Services: The 6.0% comparable sales growth was driven primarily by growth in our membership programs, as well as delivery and installation services.
Domestic gross profit rate increased in the third quarter of fiscal 2025, primarily due to improved financial performance from our services category, including our membership offerings, which was partially offset by lower profit-sharing revenue from our private label and co-branded credit card arrangement and lower product margin rates.
Domestic gross profit rate increased in the first nine months of fiscal 2025, primarily due to improved financial performance from our services category, including our membership offerings, which was partially offset by lower product margin rates and lower profit-sharing revenue from our private label and co-branded credit card arrangement.
Domestic SG&A decreased in the third quarter of fiscal 2025, primarily due to lower employee compensation expense and lower intangible asset amortization expense, partially offset by higher advertising expense.
Domestic SG&A decreased in the first nine months of fiscal 2025, primarily due to lower employee compensation expense, which was primarily store payroll, lower intangible amortization expense and reduced vehicle rental costs. These decreases were partially offset by higher advertising and technology expense.
Domestic restructuring charges in the third quarter and first nine months of fiscal 2025 were primarily related to employee termination benefits and subsequent adjustments from higher-than-expected employee retention associated with an enterprise-wide restructuring initiative that commenced in the fourth quarter of fiscal 2024. Refer to Note 2, Restructuring, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for additional information.
Domestic operating income rate increased in the third quarter and first nine months of fiscal 2025, primarily due to favorability in the gross profit rate, partially offset by decreased leverage from lower sales volume, which resulted in an unfavorable SG&A rate.
International Segment
Selected financial data for the International segment was as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Revenue | $ | 748 |
|
| $ | 760 |
|
| $ | 2,057 |
|
| $ | 2,119 |
|
Revenue % change |
| (1.6) | % |
|
| (3.4) | % |
|
| (2.9) | % |
|
| (7.9) | % |
Comparable sales % change |
| (3.7) | % |
|
| (1.9) | % |
|
| (3.0) | % |
|
| (4.2) | % |
Gross profit | $ | 168 |
|
| $ | 168 |
|
| $ | 474 |
|
| $ | 494 |
|
Gross profit as a % of revenue |
| 22.5 | % |
|
| 22.1 | % |
|
| 23.0 | % |
|
| 23.3 | % |
SG&A | $ | 155 |
|
| $ | 151 |
|
| $ | 436 |
|
| $ | 438 |
|
SG&A as a % of revenue |
| 20.7 | % |
|
| 19.9 | % |
|
| 21.2 | % |
|
| 20.7 | % |
Operating income | $ | 13 |
|
| $ | 18 |
|
| $ | 38 |
|
| $ | 58 |
|
Operating income as a % of revenue |
| 1.7 | % |
|
| 2.4 | % |
|
| 1.8 | % |
|
| 2.7 | % |
International revenue decreased in the third quarter of fiscal 2025, primarily driven by comparable sales declines in gaming, home theater and appliances, as well as the negative impact of foreign exchange rates. These decreases were partially offset by increased revenue from Best Buy Express locations.
International revenue decreased in the first nine months of fiscal 2025, primarily driven by comparable sales declines in gaming, computing and home theater, as well as the negative impact of foreign exchange rates. These decreases were partially offset by increased revenue from Best Buy Express locations and comparable sales growth in mobile phones.
International segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Mix |
| Comparable Sales | ||||||||||||
| Three Months Ended |
| Three Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Computing and Mobile Phones |
| 52 | % |
|
| 50 | % |
|
| (0.1) | % |
|
| (1.0) | % |
Consumer Electronics |
| 26 | % |
|
| 26 | % |
|
| (6.1) | % |
|
| (8.4) | % |
Appliances |
| 9 | % |
|
| 10 | % |
|
| (8.1) | % |
|
| 4.0 | % |
Entertainment |
| 6 | % |
|
| 7 | % |
|
| (18.7) | % |
|
| 18.6 | % |
Services |
| 6 | % |
|
| 6 | % |
|
| 4.0 | % |
|
| 2.4 | % |
Other |
| 1 | % |
|
| 1 | % |
|
| (12.7) | % |
|
| (37.5) | % |
Total |
| 100 | % |
|
| 100 | % |
|
| (3.7) | % |
|
| (1.9) | % |
Notable comparable sales changes by revenue category were as follows:
Computing and Mobile Phones: The 0.1% comparable sales decline was driven primarily by computing and tablets, partially offset by comparable sales growth in mobile phones.
Consumer Electronics: The 6.1% comparable sales decline was driven primarily by home theater and home automation.
Appliances: The 8.1% comparable sales decline was driven by both large and small appliances.
Entertainment: The 18.7% comparable sales decline was driven primarily by gaming.
Services: The 4.0% comparable sales growth was driven primarily by growth in our membership programs.
International gross profit rate increased in the third quarter of fiscal 2025, primarily driven by growth in the higher margin services category.
International gross profit rate decreased in the first nine months of fiscal 2025, primarily driven by lower product margin rates and higher supply chain costs, which were partially offset by growth in the higher margin services category.
International SG&A increased in the third quarter of fiscal 2025, primarily driven by expenses associated with new Best Buy Express locations.
International SG&A decreased in the first nine months of fiscal 2025, primarily driven by lower advertising expense and lower employee compensation expense, which was primarily incentive compensation. These decreases were partially offset by expenses associated with new Best Buy Express locations.
International operating income rate decreased in the third quarter of fiscal 2025, primarily due to an unfavorable SG&A rate, partially offset by a favorable gross profit rate.
International operating income rate decreased in the first nine months of fiscal 2025, primarily due to decreased leverage from lower sales volume, which resulted in an unfavorable SG&A rate, and an unfavorable gross profit rate.
Consolidated Non-GAAP Financial Measures
Reconciliations of operating income, effective tax rate and diluted EPS (GAAP financial measures) to non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted EPS (non-GAAP financial measures) were as follows ($ in millions, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| November 2, 2024 |
| October 28, 2023 |
| November 2, 2024 |
| October 28, 2023 | ||||||||
Operating income | $ | 350 |
|
| $ | 354 |
|
| $ | 1,045 |
|
| $ | 1,013 |
|
% of revenue |
| 3.7 | % |
|
| 3.6 | % |
|
| 3.8 | % |
|
| 3.5 | % |
Intangible asset amortization(1) |
| 5 |
|
|
| 15 |
|
|
| 16 |
|
|
| 56 |
|
Restructuring charges(2) |
| (4) |
|
|
| - |
|
|
| 4 |
|
|
| (16) |
|
Non-GAAP operating income | $ | 351 |
|
| $ | 369 |
|
| $ | 1,065 |
|
| $ | 1,053 |
|
% of revenue |
| 3.7 | % |
|
| 3.8 | % |
|
| 3.9 | % |
|
| 3.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate |
| 23.9 | % |
|
| 24.7 | % |
|
| 24.8 | % |
|
| 24.8 | % |
Intangible asset amortization(1) |
| (0.1) | % |
|
| - | % |
|
| - | % |
|
| 0.2 | % |
Restructuring charges(2) |
| - | % |
|
| - | % |
|
| - | % |
|
| (0.1) | % |
Non-GAAP effective tax rate |
| 23.8 | % |
|
| 24.7 | % |
|
| 24.8 | % |
|
| 24.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS | $ | 1.26 |
|
| $ | 1.21 |
|
| $ | 3.73 |
|
| $ | 3.57 |
|
Intangible asset amortization(1) |
| 0.02 |
|
|
| 0.07 |
|
|
| 0.07 |
|
|
| 0.25 |
|
Restructuring charges(2) |
| (0.02) |
|
|
| - |
|
|
| 0.02 |
|
|
| (0.07) |
|
Loss on investments |
| - |
|
|
| 0.04 |
|
|
| - |
|
|
| 0.05 |
|
Gain on sale of subsidiary, net(3) |
| - |
|
|
| - |
|
|
| - |
|
|
| (0.10) |
|
Income tax impact of non-GAAP adjustments(4) |
| - |
|
|
| (0.03) |
|
|
| (0.02) |
|
|
| (0.04) |
|
Non-GAAP diluted EPS | $ | 1.26 |
|
| $ | 1.29 |
|
| $ | 3.80 |
|
| $ | 3.66 |
|
For additional information regarding the nature of charges discussed below, refer to Note 1, Basis of Presentation, Note 2, Restructuring, and Note 3, Goodwill and Intangible Assets, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.
(1)Represents the non-cash amortization of definite-lived intangible assets associated with acquisitions, including customer relationships, tradenames and developed technology assets.
(2)Represents charges related to employee termination benefits and subsequent adjustments from higher-than-expected employee retention associated with enterprise-wide restructuring initiatives.
(3)Represents the gain on sale of a Mexico subsidiary subsequent to our exit from operations in Mexico.
(4)The non-GAAP adjustments primarily relate to the U.S. and Mexico. As such, the forecasted annual income tax charge on a portion of the U.S. non-GAAP adjustments is calculated using the statutory tax rate of 24.5%. There is no forecasted annual income tax for Mexico non-GAAP items and a portion of U.S. non-GAAP items, as there is no forecasted annual tax benefit/expense on the income/expenses in the calculation of GAAP income tax expense.
Non-GAAP operating income rate decreased in the third quarter of fiscal 2025, primarily due to an unfavorable SG&A rate, partially offset by a favorable gross profit rate. Non-GAAP operating income rate increased in the first nine months of fiscal 2025, primarily due to a favorable gross profit rate in our Domestic segment, partially offset by an unfavorable SG&A rate.
Non-GAAP effective tax rate decreased in the third quarter of fiscal 2025, primarily due to increased tax benefits from green energy incentives. Non-GAAP effective tax rate decreased in the first nine months of fiscal 2025, primarily due to increased tax benefits from green energy incentives, partially offset by reduced tax benefits from the resolution of tax matters and stock-based compensation.
Non-GAAP diluted EPS decreased in the third quarter of fiscal 2025, primarily due to the decrease in non-GAAP earnings. Non-GAAP diluted EPS increased in the first nine months of fiscal 2025, primarily due to the increase in non-GAAP earnings.
Liquidity and Capital Resources
We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment required to support our business strategies, the performance of our business, capital expenditures, dividends, credit facilities, short-term borrowing arrangements and working capital management. We modify our approach to managing these variables as changes in our operating environment arise. For example, capital expenditures and share repurchases are a component of our cash flow and capital management strategy, which, to a large extent, we can adjust in response to economic and other changes in our business environment.
Cash and cash equivalents were as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| November 2, 2024 |
| February 3, 2024 |
| October 28, 2023 | ||||||
Cash and cash equivalents |
|
|
|
| $ | 643 |
|
| $ | 1,447 |
|
| $ | 636 |
|
The decrease in cash and cash equivalents from February 3, 2024, was primarily due to dividend payments, capital expenditures and the timing and volume of inventory purchases and payments, partially offset by positive cash flows from operations, primarily driven by earnings.
The increase in cash and cash equivalents from October 28, 2023, was primarily due to positive cash flows from operations, primarily driven by earnings, partially offset by dividend payments, capital expenditures and share repurchases.
Cash Flows
Cash flows were as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nine Months Ended | ||||||
|
|
|
|
|
|
|
|
| November 2, 2024 |
| October 28, 2023 | ||||
Total cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
| $ | 561 |
|
| $ | 290 |
|
Investing activities |
|
|
|
|
|
|
|
|
| (522) |
|
|
| (600) |
|
Financing activities |
|
|
|
|
|
|
|
|
| (892) |
|
|
| (872) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
| (2) |
|
|
| (12) |
| ||||||
Decrease in cash, cash equivalents and restricted cash |
|
|
|
|
|
| $ | (855) |
|
| $ | (1,194) |
|
Operating Activities
The increase in cash provided by operating activities in the first nine months of fiscal 2025 was primarily driven by the timing and volume of inventory purchases and payments, partially offset by the timing of vendor funding receivables.
Investing Activities
Cash used in investing activities in the first nine months of fiscal 2025 decreased, primarily driven by lower capital spending. We currently expect capital expenditures to approximate $750 million in fiscal 2025 compared to $795 million in fiscal 2024.
Financing Activities
The increase in cash used in financing activities in the first nine months of fiscal 2025 was primarily driven by higher share repurchases.
Sources of Liquidity
Funds generated by operating activities, available cash and cash equivalents, our credit facilities, other debt arrangements and trade payables are our most significant sources of liquidity. We believe our sources of liquidity will be sufficient to fund operations and anticipated capital expenditures, share repurchases, dividends and strategic initiatives, including business combinations. However, in the event our liquidity is insufficient, we may be required to limit our spending. There can be no assurance that we will continue to generate cash flows at or above current levels or that we will be able to maintain our ability to borrow under our existing credit facilities or obtain additional financing, if necessary, on favorable terms.
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.
Restricted Cash
Our liquidity is also affected by restricted cash balances that are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities. Restricted cash, which is included in Other current assets on our Condensed Consolidated Balance Sheets, was $295 million, $346 million and $423 million at November 2, 2024, February 3, 2024, and October 28, 2023, respectively. The decrease in restricted cash from February 3, 2024, and October 28, 2023, was primarily due to releases of product protection reserves based on claims and purchasing behaviors of customers participating in our membership offerings.
Debt and Capital
As of November 2, 2024, we had $500 million of principal amount of notes due October 1, 2028, and $650 million of principal amount of notes due October 1, 2030. Refer to Note 6, Debt, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, and Note 8, Debt, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for additional information about our outstanding debt.
Share Repurchases and Dividends
We repurchase our common stock and pay dividends pursuant to programs approved by our Board of Directors (“Board”). The payment of cash dividends is also subject to customary legal and contractual restrictions. Our long-term capital allocation strategy is to first fund operations and investments in growth and then return excess cash over time to shareholders through dividends and share repurchases while maintaining investment-grade credit metrics. Our share repurchase plans are evaluated on an ongoing basis, considering factors such as our financial condition and cash flows, our economic outlook, the impact of tax laws, our liquidity needs, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on such factors.
On February 28, 2022, our Board approved a $5.0 billion share repurchase program. There is no expiration date governing the period over which we can repurchase shares under this authorization.
Share repurchase and dividend activity were as follows ($ 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 | ||||||||
Total cost of shares repurchased | $ | 135 |
|
| $ | 128 |
|
| $ | 285 |
|
| $ | 278 |
|
Average price per share | $ | 95.43 |
|
| $ | 71.61 |
|
| $ | 87.19 |
|
| $ | 74.16 |
|
Total number of shares repurchased |
| 1.4 |
|
|
| 1.8 |
|
|
| 3.2 |
|
|
| 3.7 |
|
Regular quarterly cash dividend per share | $ | 0.94 |
|
| $ | 0.92 |
|
| $ | 2.82 |
|
| $ | 2.76 |
|
Cash dividends declared and paid | $ | 202 |
|
| $ | 201 |
|
| $ | 607 |
|
| $ | 603 |
|
The total cost of shares repurchased increased in the third quarter and first nine months of fiscal 2025, primarily due to an increase in the average price per share, partially offset by a decrease in the volume of repurchases. We currently expect total share repurchases of up to $500 million in fiscal 2025.
Cash dividends declared and paid increased during the third quarter and first nine months of fiscal 2025, due to the increase in the regular quarterly cash dividend per share, partially offset by fewer shares outstanding.
Off-Balance-Sheet Arrangements and Contractual Obligations
Our liquidity is not dependent on the use of off-balance-sheet financing arrangements other than in connection with our $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of November 2, 2024, which, if drawn upon, would be included in either short-term or long-term debt on our Condensed Consolidated Balance Sheets.
There has been no material change in our contractual obligations other than in the ordinary course of business since the end of fiscal 2024. See our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for additional information regarding our off-balance-sheet arrangements and contractual obligations.
Significant Accounting Policies and Estimates
We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, and our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024. There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal 2024.
New or Recently Issued Accounting Pronouncements
For a description of applicable new or recently issued accounting pronouncements, including our assessment of the impact on our financial statements, see Note 1, Basis of Presentation, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), provide a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their companies. With the exception of historical information, the matters discussed in this Quarterly Report on Form 10-Q are forward-looking statements and may be identified by the use of words such as “anticipate,” “appear,” “approximate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “guidance,” “intend,” “may,” “might,” “outlook,” “plan,” “possible,” “project,” “seek,” “should,” “would,” and other words and terms of similar meaning or the negatives thereof. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, our operating model, new strategies and growth initiatives, the competitive environment, consumer behavior and other events. These statements involve a number of judgments and are subject to certain risks and uncertainties, many of which are outside the control of the Company, that could cause actual results to differ materially from the potential results discussed in such forward-looking statements. Readers should review Item 1A, Risk Factors, of our most recent Annual Report on Form 10-K, and any updated information in subsequent Quarterly Reports on Form 10-Q, for a description of important factors that could cause our actual results to differ materially from those contemplated by the forward-looking statements made in this Quarterly Report on Form 10-Q. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: macroeconomic pressures in the markets in which we operate (including but not limited to recession, inflation rates, fluctuations in foreign currency exchange rates, limitations on a government’s ability to borrow and/or spend capital, fluctuations in housing prices, energy markets, jobless rates, the imposition of tariffs, trade wars and effects related to the conflicts in Eastern Europe and the Middle East or other geopolitical events); catastrophic events, health crises and pandemics; susceptibility of the products we sell to technological advancements, product life cycle fluctuations and changes in consumer preferences; competition (including from multi-channel retailers, e-commerce business, technology service providers, traditional store-based retailers, vendors and mobile network carriers and in the provision of delivery speed and options); our ability to attract and retain qualified employees; changes in market compensation rates; our expansion into health and new products, services and technologies; our focus on services as a strategic priority; our reliance on key vendors and mobile network carriers (including product availability); our ability to maintain positive brand perception and recognition; our ability to effectively manage strategic ventures, alliances or acquisitions; our ability to effectively manage our real estate portfolio; inability of vendors or service providers to perform components of our supply chain (impacting our stores or other aspects of our operations) and other various functions of our business; risks arising from and potentially unique to our exclusive brands products; risks associated with vendors that source products outside of the U.S.; our reliance on our information technology systems, internet and telecommunications access and capabilities; our ability to prevent or effectively respond to a cyber-attack, privacy or security breach; product safety and quality concerns; changes to labor or employment laws or regulations; risks arising from statutory, regulatory and legal developments (including statutes and/or regulations related to tax or privacy); evolving corporate governance and public disclosure regulations and expectations (including, but not limited to, cybersecurity and environmental, social and governance matters); risks arising from our international activities (including those related to the conflicts in Eastern Europe and the Middle East, fluctuations in foreign currency exchange rates, the imposition of tariffs and trade wars) and those of our vendors; failure to effectively manage our costs; our dependence on cash flows and net earnings generated during the fourth fiscal quarter; pricing investments and promotional activity; economic or regulatory developments that might affect our ability to provide attractive promotional financing; constraints in the capital markets; changes to our vendor credit terms; changes in our credit ratings; and failure to meet financial-performance guidance or other forward-looking statements. We caution that the foregoing list of important factors is not complete. Any forward-looking statements speak only as of the date they are made and we assume no obligation to update any forward-looking statement that we may make.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
As disclosed in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, in addition to the risks inherent in our operations, we are exposed to certain market risks.
Interest Rate Risk
We are exposed to changes in short-term market interest rates and these changes in rates will impact our net interest expense. Our cash, cash equivalents and restricted cash generate interest income that will vary based on changes in short-term interest rates. In addition, we have swapped a portion of our fixed-rate debt to floating rate such that the interest expense on this debt will vary with short-term interest rates. Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for further information regarding our interest rate swaps.
As of November 2, 2024, we had $0.9 billion of cash, cash equivalents and restricted cash and $0.5 billion of debt that has been swapped to floating rate, and therefore the net asset balance exposed to interest rate changes was $0.4 billion. As of November 2, 2024, a 50-basis point increase in short-term interest rates would have led to an estimated $2 million increase in interest income, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated $2 million decrease in interest income.
Foreign Currency Exchange Rate Risk
We have market risk arising from changes in foreign currency exchange rates related to operations in our International segment. On a limited basis, we utilize foreign exchange forward contracts to manage foreign currency exposure to certain forecasted inventory purchases, recognized receivable and payable balances and our investment in our Canadian operations. Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for additional information regarding these instruments.
In the third quarter and first nine months of fiscal 2025, foreign currency exchange rate fluctuations were driven by the strength of the U.S. dollar against the Canadian dollar compared to the prior-year period. We estimate that the foreign currency exchange rate fluctuations had an unfavorable impact on our revenue of approximately $6 million and $25 million in the third quarter and first nine months of fiscal 2025, respectively. The impact of foreign exchange rate fluctuations on our net earnings in the third quarter and first nine months of fiscal 2025 was not significant.
Item 4.Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s (“SEC”) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosure. We have established a Disclosure Committee, consisting of certain members of management, to assist in this evaluation. The Disclosure Committee meets on a regular quarterly basis and more often if necessary.
Our management, including our Chief Executive Officer and Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), at November 2, 2024. Based on that evaluation, our Chief Executive Officer and Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer concluded that, at November 2, 2024, our disclosure controls and procedures were effective.
There were no changes in internal control over financial reporting during the fiscal quarter ended November 2, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1.Legal Proceedings
For information about our legal proceedings, see Note 10, Contingencies, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
c) Stock Repurchases
On February 28, 2022, our Board approved a $5.0 billion share repurchase program. There is no expiration date governing the period over which we can repurchase shares under this authorization. For additional information, see Note 9, Repurchase of Common Stock, of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
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Fiscal Period |
| Total Number of |
| Average Price Paid |
| Total Number of Shares Purchased as Part of Publicly Announced Program |
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||
August 4, 2024 through August 31, 2024 |
| 376,830 |
|
| $ | 86.40 |
|
|
| 376,830 |
|
| $ | 3,602,000,000 |
|
September 1, 2024 through October 5, 2024 |
| 736,070 |
|
| $ | 99.08 |
|
|
| 736,070 |
|
| $ | 3,529,000,000 |
|
October 6, 2024 through November 2, 2024 |
| 306,831 |
|
| $ | 97.77 |
|
|
| 306,831 |
|
| $ | 3,499,000,000 |
|
Total fiscal 2025 third quarter |
| 1,419,731 |
|
| $ | 95.43 |
|
|
| 1,419,731 |
|
| $ | 3,499,000,000 |
|
Item 5.Other Information
Rule 10b5-1 Plan Elections
Set forth below are developments regarding trading plan arrangements among our directors and officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) for the quarter ended November 2, 2024.
On
Item 6.Exhibits
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101 | The following financial information from our Quarterly Report on Form 10-Q for the third quarter of fiscal 2025, filed with the SEC on December 6, 2024, formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) the Condensed Consolidated Balance Sheets as of November 2, 2024, February 3, 2024, and October 28, 2023, (ii) the Condensed Consolidated Statements of Earnings for the three and nine months ended November 2, 2024, and October 28, 2023, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended November 2, 2024, and October 28, 2023, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended November 2, 2024, and October 28, 2023, (v) the Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended November 2, 2024, and October 28, 2023, and (vi) the Notes to Condensed Consolidated Financial Statements. |
104 | The cover page from our Quarterly Report on Form 10-Q for the third quarter of fiscal 2025, filed with the SEC on December 6, 2024, formatted in iXBRL (included as Exhibit 101). |
(1)The certifications in Exhibit 32.1 and Exhibit 32.2 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Pursuant to Item 601(b)(4)(iii) of Regulation S-K under the Securities Act of 1933, as amended, the registrant has not filed as exhibits to this Quarterly Report on Form 10-Q certain instruments with respect to long-term debt under which the amount of securities authorized does not exceed 10% of the total assets of the registrant. The registrant hereby agrees to furnish copies of all such instruments to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| BEST BUY CO., INC. | |
| (Registrant) | |
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Date: December 6, 2024 | By: | /s/ CORIE BARRY |
|
| Corie Barry |
|
| Chief Executive Officer |
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Date: December 6, 2024 | By: | /s/ MATTHEW BILUNAS |
|
| Matthew Bilunas |
|
| Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer |
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Date: December 6, 2024 | By: | /s/ MATHEW R. WATSON |
|
| Mathew R. Watson |
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| Senior Vice President, Finance – Controller and Chief Accounting Officer |