Best Buy Reports First Quarter Results
Comparable Sales Declined
GAAP Diluted EPS of
Non-GAAP Diluted EPS of
FY24 Financial Guidance Remains Unchanged
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Q1 FY24 |
Q1 FY23 |
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Revenue ($ in millions) |
|
|
|
|
|
|
Enterprise |
$ |
9,467 |
|
$ |
10,647 |
|
Domestic segment |
$ |
8,801 |
|
$ |
9,894 |
|
International segment |
$ |
666 |
|
$ |
753 |
|
Enterprise comparable sales % change1 |
|
(10.1) |
% |
|
(8.0) |
% |
Domestic comparable sales % change1 |
|
(10.4) |
% |
|
(8.5) |
% |
Domestic comparable online sales % change1 |
|
(12.1) |
% |
|
(14.9) |
% |
International comparable sales % change1 |
|
(5.5) |
% |
|
(1.4) |
% |
Operating Income |
|
|
|
|
|
|
GAAP operating income as a % of revenue |
|
3.3 |
% |
|
4.3 |
% |
Non-GAAP operating income as a % of revenue |
|
3.4 |
% |
|
4.6 |
% |
Diluted Earnings per Share ("EPS") |
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|
|
|
|
GAAP diluted EPS |
$ |
1.11 |
|
$ |
1.49 |
|
Non-GAAP diluted EPS |
$ |
1.15 |
|
$ |
1.57 |
|
For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.
“Today we are reporting Q1 sales results that are right in line with the expectations we shared in March and profitability that was better than expected, demonstrating our strong operational execution,” said Corie Barry, Best Buy CEO. “We continue to appropriately balance the need to adjust in response to the current industry sales trends with the need to invest so we can capitalize on opportunities as our industry moves through this downturn and returns to growth.”
“In this environment, customers are clearly feeling cautious and making tradeoff decisions as they continue to deal with high inflation and low consumer confidence due to a number of factors,” continued Barry. “At the same time, in the first quarter, we continued to see our purchasing customer behavior remain relatively consistent in terms of demographics and the percentage of purchases categorized as premium. In addition, our focus on being there for our customers with expertise and support was highlighted by material improvements in customer satisfaction scores for our in-home services and delivery, and record scores in remote support, in-home repair, store care, and Best Buy Totaltech call center experiences – all key differentiators for us.”
FY24 Financial Guidance
“Our sales performance in the first quarter aligned with our expectations and we are maintaining the full year guidance we provided this past March,” said Matt Bilunas, Best Buy CFO. “As a reminder, our guidance assumed the consumer electronics industry would continue to feel the pressure of the broader macro environment and a high degree of uncertainty as it relates to the consumer.”
“As we enter the second quarter, we expect our comparable sales to decline in the range of
Best Buy’s guidance for FY24, which includes 53 weeks, remains unchanged from last quarter and is the following:
-
Revenue of
to$43.8 billion $45.2 billion -
Comparable sales decline of
3.0% to6.0% -
Enterprise non-GAAP operating income rate2 of
3.7% to4.1% -
Non-GAAP effective income tax rate2 of approximately
24.5% -
Non-GAAP diluted EPS2 of
to$5.70 $6.50 -
Capital expenditures of approximately
$850 million
Note: Incorporated in the above guidance, the 53rd week is expected to add approximately
Domestic Segment Q1 FY24 Results
Domestic Revenue
Domestic revenue of
From a merchandising perspective, the largest drivers of the comparable sales decline on a weighted basis were computing, appliances, home theater and mobile phones. These drivers were partially offset by growth in the gaming and services categories.
Domestic online revenue of
Domestic Gross Profit Rate
Domestic gross profit rate was
Domestic Selling, General and Administrative Expenses (“SG&A”)
Domestic GAAP SG&A was
International Segment Q1 FY24 Results
International Revenue
International revenue of
International Gross Profit Rate
International gross profit rate was
International SG&A
International SG&A was
Share Repurchases and Dividends
In Q1 FY24, the company returned a total of
Today, the company announced its board of directors has authorized the payment of a regular quarterly cash dividend of
Conference Call
Best Buy is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on May 25, 2023. A webcast of the call is expected to be available at www.investors.bestbuy.com, both live and after the call.
Notes:
(1) 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. For additional information on comparable sales, please see our most recent Annual Report on Form 10-K, and our subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”), and available at www.investors.bestbuy.com.
(2) A reconciliation of the projected non-GAAP operating income rate, non-GAAP effective income tax rate and non-GAAP diluted EPS, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measures, is not provided because the company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as restructuring charges; price-fixing settlements; goodwill impairments; gains and losses on investments; intangible asset amortization; certain acquisition-related costs; and the tax effect of all such items. Historically, the company has excluded these items from non-GAAP financial measures. The company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business or reaching settlement of a legal dispute, are inherently unpredictable as to if or when they may occur. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
Forward-Looking and Cautionary Statements:
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements reflect management’s current views and estimates regarding future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use 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 release. 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 the effects of COVID-19, 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, and jobless rates and effects related to the conflict in
BEST BUY CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS ($ and shares in millions, except per share amounts) (Unaudited and subject to reclassification) |
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Three Months Ended |
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April 29, 2023 |
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April 30, 2022 |
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Revenue |
$ |
9,467 |
|
|
$ |
10,647 |
|
Cost of sales |
|
7,317 |
|
|
|
8,294 |
|
Gross profit |
|
2,150 |
|
|
|
2,353 |
|
Gross profit % |
|
22.7 |
% |
|
|
22.1 |
% |
Selling, general and administrative expenses |
1,848 |
|
|
|
1,890 |
|
|
SG&A % |
|
19.5 |
% |
|
|
17.8 |
% |
Restructuring charges |
|
(9) |
|
|
|
1 |
|
Operating income |
|
311 |
|
|
|
462 |
|
Operating income % |
|
3.3 |
% |
|
|
4.3 |
% |
Other income (expense): |
|
|
|
|
|
|
|
Investment income (expense) and other |
|
21 |
|
|
|
(5) |
|
Interest expense |
|
(12) |
|
|
|
(6) |
|
Earnings before income tax expense and equity in loss of affiliates |
320 |
|
|
|
451 |
|
|
Income tax expense |
|
75 |
|
|
|
110 |
|
Effective tax rate |
|
23.3 |
% |
|
|
24.4 |
% |
Equity in loss of affiliates |
|
(1) |
|
|
|
- |
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Net earnings |
$ |
244 |
|
|
$ |
341 |
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|
|
|
|
|
|
|
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Basic earnings per share |
$ |
1.11 |
|
|
$ |
1.50 |
|
Diluted earnings per share |
$ |
1.11 |
|
|
$ |
1.49 |
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|
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|
Weighted-average common shares outstanding: |
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Basic |
|
218.9 |
|
|
|
226.8 |
|
Diluted |
|
219.9 |
|
|
|
228.4 |
|
BEST BUY CO., INC. CONDENSED CONSOLIDATED BALANCE SHEETS ($ in millions) (Unaudited and subject to reclassification) |
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April 29, 2023 |
|
April 30, 2022 |
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Assets |
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Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,030 |
|
|
$ |
640 |
|
Receivables, net |
|
860 |
|
|
|
804 |
|
Merchandise inventories |
|
5,219 |
|
|
|
6,258 |
|
Other current assets |
|
653 |
|
|
|
613 |
|
Total current assets |
|
7,762 |
|
|
|
8,315 |
|
Property and equipment, net |
|
2,321 |
|
|
|
2,251 |
|
Operating lease assets |
|
2,694 |
|
|
|
2,704 |
|
Goodwill |
|
1,383 |
|
|
|
1,385 |
|
Other assets |
|
528 |
|
|
|
596 |
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Total assets |
$ |
14,688 |
|
|
$ |
15,251 |
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Liabilities and equity |
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Current liabilities: |
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Accounts payable |
$ |
4,874 |
|
|
$ |
5,492 |
|
Unredeemed gift card liabilities |
|
256 |
|
|
|
284 |
|
Deferred revenue |
|
1,015 |
|
|
|
1,101 |
|
Accrued compensation and related expenses |
|
364 |
|
|
|
336 |
|
Accrued liabilities |
|
759 |
|
|
|
771 |
|
Current portion of operating lease liabilities |
|
625 |
|
|
|
636 |
|
Current portion of long-term debt |
|
15 |
|
|
|
15 |
|
Total current liabilities |
|
7,908 |
|
|
|
8,635 |
|
Long-term operating lease liabilities |
|
2,128 |
|
|
|
2,121 |
|
Long-term liabilities |
|
704 |
|
|
|
558 |
|
Long-term debt |
|
1,155 |
|
|
|
1,170 |
|
Equity |
|
2,793 |
|
|
|
2,767 |
|
Total liabilities and equity |
$ |
14,688 |
$ |
15,251 |
BEST BUY CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions) (Unaudited and subject to reclassification) |
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Three Months Ended |
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April 29, 2023 |
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April 30, 2022 |
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Operating activities |
|
|
|
|
|
|
|
Net earnings |
$ |
244 |
|
|
$ |
341 |
|
Adjustments to reconcile net earnings to total cash used in operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
237 |
|
|
|
224 |
|
Restructuring charges |
|
(9) |
|
|
|
1 |
|
Stock-based compensation |
|
38 |
|
|
|
39 |
|
Other, net |
|
14 |
|
|
|
12 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
||
Receivables |
|
279 |
|
|
|
238 |
|
Merchandise inventories |
|
(86) |
|
|
|
(297) |
|
Other assets |
|
(17) |
|
|
|
4 |
|
Accounts payable |
|
(790) |
|
|
|
(1,296) |
|
Income taxes |
|
46 |
|
|
|
63 |
|
Other liabilities |
|
(287) |
|
|
|
(713) |
|
Total cash used in operating activities |
|
(331) |
|
|
|
(1,384) |
|
|
|
|
|
|
|
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Investing activities |
|
|
|
|
|
|
|
Additions to property and equipment |
|
(204) |
|
|
|
(215) |
|
Other, net |
|
- |
|
|
|
2 |
|
Total cash used in investing activities |
|
(204) |
|
|
|
(213) |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Repurchase of common stock |
|
(79) |
|
|
|
(455) |
|
Dividends paid |
|
(202) |
|
|
|
(199) |
|
Other, net |
|
- |
|
|
|
4 |
|
Total cash used in financing activities |
|
(281) |
|
|
|
(650) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(5) |
|
|
|
2 |
|
Decrease in cash, cash equivalents and restricted cash |
|
(821) |
|
|
|
(2,245) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
2,253 |
|
|
|
3,205 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
1,432 |
|
|
$ |
960 |
|
BEST BUY CO., INC. SEGMENT INFORMATION ($ in millions) (Unaudited and subject to reclassification) |
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Three Months Ended |
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Domestic Segment Results |
April 29, 2023 |
|
April 30, 2022 |
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Revenue |
$ |
8,801 |
|
|
$ |
9,894 |
|
Comparable sales % change |
|
(10.4) |
% |
|
|
(8.5) |
% |
Comparable online sales % change |
|
(12.1) |
% |
|
|
(14.9) |
% |
Gross profit |
$ |
1,992 |
|
|
$ |
2,170 |
|
Gross profit as a % of revenue |
|
22.6 |
% |
|
|
21.9 |
% |
SG&A |
$ |
1,710 |
|
|
$ |
1,741 |
|
SG&A as a % of revenue |
|
19.4 |
% |
|
|
17.6 |
% |
Operating income |
$ |
290 |
|
|
$ |
429 |
|
Operating income as a % of revenue |
|
3.3 |
% |
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
Domestic Segment Non-GAAP Results1 |
|
|
|
|
|
|
|
Gross profit |
$ |
1,992 |
|
|
$ |
2,170 |
|
Gross profit as a % of revenue |
|
22.6 |
% |
|
|
21.9 |
% |
SG&A |
$ |
1,690 |
|
|
$ |
1,719 |
|
SG&A as a % of revenue |
|
19.2 |
% |
|
|
17.4 |
% |
Operating income |
$ |
302 |
|
|
$ |
451 |
|
Operating income as a % of revenue |
|
3.4 |
% |
|
|
4.6 |
% |
|
|
|
|
|
|
|
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|
Three Months Ended |
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International Segment Results |
April 29, 2023 |
|
April 30, 2022 |
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Revenue |
$ |
666 |
|
|
$ |
753 |
|
Comparable sales % change |
|
(5.5) |
% |
|
|
(1.4) |
% |
Gross profit |
$ |
158 |
|
|
$ |
183 |
|
Gross profit as a % of revenue |
|
23.7 |
% |
|
|
24.3 |
% |
SG&A |
$ |
138 |
|
|
$ |
149 |
|
SG&A as a % of revenue |
|
20.7 |
% |
|
|
19.8 |
% |
Operating income |
$ |
21 |
|
|
$ |
33 |
|
Operating income as a % of revenue |
|
3.2 |
% |
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
International Segment Non-GAAP Results1 |
|
|
|
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Gross profit |
$ |
158 |
|
|
$ |
183 |
|
Gross profit as a % of revenue |
|
23.7 |
% |
|
|
24.3 |
% |
SG&A |
$ |
138 |
|
|
$ |
149 |
|
SG&A as a % of revenue |
|
20.7 |
% |
|
|
19.8 |
% |
Operating income |
$ |
20 |
|
|
$ |
34 |
|
Operating income as a % of revenue |
|
3.0 |
% |
|
|
4.5 |
% |
(1) |
For GAAP to non-GAAP reconciliations, please refer to the attached supporting schedule titled Reconciliation of Non-GAAP Financial Measures. |
BEST BUY CO., INC. REVENUE CATEGORY SUMMARY (Unaudited and subject to reclassification) |
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Revenue Mix |
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Comparable Sales |
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Three Months Ended |
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Three Months Ended |
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Domestic Segment |
April 29, 2023 |
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April 30, 2022 |
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April 29, 2023 |
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April 30, 2022 |
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Computing and Mobile Phones |
42 |
% |
|
43 |
% |
|
(13.3) |
% |
|
(10.5) |
% |
Consumer Electronics |
29 |
% |
|
29 |
% |
|
(9.8) |
% |
|
(9.7) |
% |
Appliances |
15 |
% |
|
16 |
% |
|
(15.5) |
% |
|
2.9 |
% |
Entertainment |
7 |
% |
|
6 |
% |
|
3.8 |
% |
|
(13.6) |
% |
Services |
6 |
% |
|
5 |
% |
|
12.0 |
% |
|
(12.4) |
% |
Other |
1 |
% |
|
1 |
% |
|
(12.1) |
% |
|
26.0 |
% |
Total |
100 |
% |
|
100 |
% |
|
(10.4) |
% |
|
(8.5) |
% |
|
|
|
|
|
|
|
|
|
|
|
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|
Revenue Mix |
|
Comparable Sales |
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Three Months Ended |
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Three Months Ended |
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International Segment |
April 29, 2023 |
|
April 30, 2022 |
|
April 29, 2023 |
|
April 30, 2022 |
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Computing and Mobile Phones |
47 |
% |
|
46 |
% |
|
(3.6) |
% |
|
(7.9) |
% |
Consumer Electronics |
28 |
% |
|
28 |
% |
|
(9.1) |
% |
|
3.8 |
% |
Appliances |
9 |
% |
|
9 |
% |
|
(11.7) |
% |
|
9.4 |
% |
Entertainment |
9 |
% |
|
8 |
% |
|
12.0 |
% |
|
(7.5) |
% |
Services |
5 |
% |
|
7 |
% |
|
(11.2) |
% |
|
31.4 |
% |
Other |
2 |
% |
|
2 |
% |
|
(19.0) |
% |
|
(3.9) |
% |
Total |
100 |
% |
100 |
% |
(5.5) |
% |
(1.4) |
% |
BEST BUY CO., INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ($ in millions, except per share amounts) (Unaudited and subject to reclassification)
The following information provides reconciliations of the most comparable financial measures presented in accordance with accounting principles generally accepted in the |
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Three Months Ended |
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Three Months Ended |
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April 29, 2023 |
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April 30, 2022 |
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Domestic |
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International |
|
Consolidated |
|
Domestic |
|
International |
|
Consolidated |
||||||||||||
SG&A |
$ |
1,710 |
|
|
$ |
138 |
|
|
$ |
1,848 |
|
|
$ |
1,741 |
|
|
$ |
149 |
|
|
$ |
1,890 |
|
% of revenue |
|
19.4 |
% |
|
|
20.7 |
% |
|
|
19.5 |
% |
|
|
17.6 |
% |
|
|
19.8 |
% |
|
|
17.8 |
% |
Intangible asset amortization1 |
|
(20) |
|
|
|
- |
|
|
|
(20) |
|
|
|
(22) |
|
|
|
- |
|
|
|
(22) |
|
Non-GAAP SG&A |
$ |
1,690 |
|
|
$ |
138 |
|
|
$ |
1,828 |
|
|
$ |
1,719 |
|
|
$ |
149 |
|
|
$ |
1,868 |
|
% of revenue |
|
19.2 |
% |
|
|
20.7 |
% |
|
|
19.3 |
% |
|
|
17.4 |
% |
|
|
19.8 |
% |
|
|
17.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ |
290 |
|
|
$ |
21 |
|
|
$ |
311 |
|
|
$ |
429 |
|
|
$ |
33 |
|
|
$ |
462 |
|
% of revenue |
|
3.3 |
% |
|
|
3.2 |
% |
|
|
3.3 |
% |
|
|
4.3 |
% |
|
|
4.4 |
% |
|
|
4.3 |
% |
Intangible asset amortization1 |
|
20 |
|
|
|
- |
|
|
|
20 |
|
|
|
22 |
|
|
|
- |
|
|
|
22 |
|
Restructuring charges2 |
|
(8) |
|
|
|
(1) |
|
|
|
(9) |
|
|
|
- |
|
|
|
1 |
|
|
|
1 |
|
Non-GAAP operating income |
$ |
302 |
|
|
$ |
20 |
|
|
$ |
322 |
|
|
$ |
451 |
|
|
$ |
34 |
|
|
$ |
485 |
|
% of revenue |
|
3.4 |
% |
|
|
3.0 |
% |
|
|
3.4 |
% |
|
|
4.6 |
% |
|
|
4.5 |
% |
|
|
4.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate |
|
|
|
|
|
|
|
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
|
24.4 |
% |
Intangible asset amortization1 |
|
|
|
|
|
|
|
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
- |
% |
Non-GAAP effective tax rate |
|
|
|
|
|
|
|
|
|
23.4 |
% |
|
|
|
|
|
|
|
|
|
|
24.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
||||||||||||||||||||
|
April 29, 2023 |
|
April 30, 2022 |
||||||||||||||||||||
Pretax Earnings |
|
Net of Tax3 |
|
Per Share |
|
Pretax Earnings |
|
Net of Tax3 |
|
Per Share |
|||||||||||||
Diluted EPS |
|
|
|
|
|
|
|
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
$ |
1.49 |
|
Intangible asset amortization1 |
$ |
20 |
|
|
$ |
15 |
|
|
|
0.07 |
|
|
$ |
22 |
|
|
$ |
17 |
|
|
|
0.08 |
|
Restructuring charges2 |
|
(9) |
|
|
|
(7) |
|
|
|
(0.03) |
|
|
|
1 |
|
|
|
1 |
|
|
|
- |
|
Non-GAAP diluted EPS |
|
|
|
|
|
|
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
$ |
1.57 |
|
(1) |
Represents the non-cash amortization of definite-lived intangible assets associated with acquisitions, including customer relationships, tradenames and developed technology assets. |
(2) |
Primarily represents adjustments related to employee termination benefits from higher-than-expected employee retention related to previously planned organizational changes. |
(3) |
The non-GAAP adjustments primarily relate to the |
Return on Assets and Non-GAAP Return on Investment
The tables below provide calculations of return on assets ("ROA") (GAAP financial measure) and non-GAAP return on investment (“ROI”) (non-GAAP financial measure) for the periods presented. The company believes ROA is the most directly comparable financial measure to ROI. Non-GAAP ROI is defined as non-GAAP adjusted operating income after tax divided by average invested operating assets. All periods presented below apply this methodology consistently. The company believes non-GAAP ROI is a meaningful metric for investors to evaluate capital efficiency because it measures how key assets are deployed by adjusting operating income and total assets for the items noted below. This method of determining non-GAAP ROI may differ from other companies' methods and therefore may not be comparable to those used by other companies. |
|||||||
|
|
|
|
|
|
|
|
Return on Assets ("ROA") |
April 29, 20231 |
|
April 30, 20221 |
||||
Net earnings |
$ |
1,322 |
|
|
$ |
2,200 |
|
Total assets |
|
16,242 |
|
|
|
18,370 |
|
ROA |
|
8.1 |
% |
|
|
12.0 |
% |
|
|
|
|
|
|
|
|
Non-GAAP Return on Investment ("ROI") |
April 29, 20231 |
|
April 30, 20221 |
||||
Numerator |
|
|
|
|
|
|
|
Operating income |
$ |
1,644 |
|
|
$ |
2,732 |
|
Add: Non-GAAP operating income adjustments2 |
|
221 |
|
|
|
104 |
|
Add: Operating lease interest3 |
|
114 |
|
|
|
108 |
|
Less: Income taxes4 |
|
(485) |
|
|
|
(721) |
|
Add: Depreciation |
|
847 |
|
|
|
793 |
|
Add: Operating lease amortization5 |
|
664 |
|
|
|
654 |
|
Adjusted operating income after tax |
$ |
3,005 |
|
|
$ |
3,670 |
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
Total assets |
$ |
16,242 |
|
|
$ |
18,370 |
|
Less: Excess cash6 |
|
(264) |
|
|
|
(2,275) |
|
Add: Accumulated depreciation and amortization7 |
|
5,110 |
|
|
|
6,687 |
|
Less: Adjusted current liabilities8 |
|
(8,853) |
|
|
|
(10,136) |
|
Average invested operating assets |
$ |
12,235 |
|
|
$ |
12,646 |
|
|
|
|
|
|
|
|
|
Non-GAAP ROI |
|
24.6 |
% |
|
|
29.0 |
% |
(1) |
Income statement accounts represent the activity for the trailing 12 months ended as of each of the balance sheet dates. Balance sheet accounts represent the average account balances for the trailing 12 months ended as of each of the balance sheet dates. |
(2) |
Non-GAAP operating income adjustments include continuing operations adjustments for restructuring charges, intangible asset amortization and acquisition-related transaction costs. Additional details regarding these adjustments are included in the Reconciliation of Non-GAAP Financial Measures schedule within the company’s earnings releases. |
(3) |
Operating lease interest represents the add-back to operating income to approximate the total interest expense that the company would incur if its operating leases were owned and financed by debt. The add-back is approximated by multiplying average operating lease assets by |
(4) |
Income taxes are approximated by using a blended statutory rate at the Enterprise level based on statutory rates from the countries in which the company does business, which primarily consists of the |
(5) |
Operating lease amortization represents operating lease cost less operating lease interest. Operating lease cost includes short-term leases, which are immaterial, and excludes variable lease costs as these costs are not included in the operating lease asset balance. |
(6) |
Excess cash represents the amount of cash, cash equivalents and short-term investments greater than |
(7) |
Accumulated depreciation and amortization represents accumulated depreciation related to property and equipment and accumulated amortization related to definite-lived intangible assets. |
(8) |
Adjusted current liabilities represent total current liabilities less short-term debt and the current portions of operating lease liabilities and long-term debt. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230524005845/en/
Investor Contact:
Mollie O'Brien
mollie.obrien@bestbuy.com
Media Contact:
Carly Charlson
carly.charlson@bestbuy.com
Source: Best Buy Co., Inc.