UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~August~~November 32, 2024


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-9595

A black text with a yellow tag

Description automatically generated

BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)


Minnesota		41-0907483
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7601 Penn Avenue South
Richfield, Minnesota		55423
(Address of principal executive offices)		(Zip Code)

(612) 291-1000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, $0.10 par value per share	BBY	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer 	Accelerated Filer 		Non-accelerated Filer 

Smaller Reporting Company 		Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The registrant had ~~214~~213,~~725~~795,~~246~~603 shares of common stock outstanding as of ~~September~~December 4, 2024.

‎

Table of Contents

BEST BUY CO., INC.

FORM 10-Q FOR THE QUARTER ENDED ~~AUGUST~~NOVEMBER 32, 2024

TABLE OF CONTENTS

Part I — Financial Information				3
Item 1.		Financial Statements		3
	a)	Condensed Consolidated Balance Sheets as of ~~August~~November 32, 2024, February 3, 2024, and ~~July~~October 2928, 2023		3
	b)	Condensed Consolidated Statements of Earnings for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023		4
	c)	Condensed Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023		5
	d)	Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023		6
	e)	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023		7
	f)	Notes to Condensed Consolidated Financial Statements		8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		24
Item 4.		Controls and Procedures		2425
Part II — Other Information				2425
Item 1.		Legal Proceedings		2425
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 5.		Other Information		2526
Item 6.		Exhibits		2526
Signatures			2627

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We disclose information to the public concerning Best Buy, Best Buy’s products, content and services and other items through our websites in order to achieve broad, non-exclusionary distribution of information to the public. Some of the information distributed through this channel may be considered material information. Investors and others are encouraged to review the information we make public in the locations below.* This list may be updated from time to time.

For information concerning Best Buy and its products, content and services, please visit: https://bestbuy.com.

For information provided to the investment community, including news releases, events and presentations, and filings with the SEC, please visit: https://investors.bestbuy.com.

For the latest information from Best Buy, including press releases, please visit: https://corporate.bestbuy.com/archive/.

* These corporate websites, and the contents thereof, are not incorporated by reference into this Quarterly Report on Form 10-Q nor deemed filed with the SEC.

‎

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

$ in millions, except per share amounts (unaudited)

	August 3, 2024		February 3, 2024		July 29, 2023
	November 2, 2024		February 3, 2024		October 28, 2023
Assets
Current assets
Cash and cash equivalents	$	~~1,387~~643	$	1,447	$	~~1,093~~636
Receivables, net		~~871~~932		939		~~856~~901
Merchandise inventories		57,~~706~~806		4,958		57,~~651~~562
Other current assets		~~598~~574		553		~~704~~766
Total current assets		89,~~562~~955		7,897		89,~~304~~865
Property and equipment, net		2,~~183~~196		2,260		2,~~305~~313
Operating lease assets		2,~~860~~842		2,758		2,~~813~~827
Goodwill		1,383		1,383		1,383
Other assets		~~636~~642		669		~~513~~494
Total assets	$	1517,~~624~~018	$	14,967	$	1516,~~318~~882
Liabilities and equity
Current liabilities
Accounts payable	$	57,~~542~~145	$	4,637	$	57,~~471~~133
Unredeemed gift card liabilities		~~243~~246		253		~~250~~245
Deferred revenue		~~940~~878		1,000		~~996~~934
Accrued compensation and related expenses		~~347~~361		486		~~377~~309
Accrued liabilities		~~756~~690		902		~~709~~760
Current portion of operating lease liabilities		~~610~~616		618		~~615~~614
Current portion of long-term debt		1312		13		15
Total current liabilities		89,~~451~~948		7,909		810,~~433~~010
Long-term operating lease liabilities		2,~~316~~293		2,199		2,~~254~~270
Long-term debt		1,~~157~~144		1,152		1,~~145~~130
Long-term liabilities		~~593~~551		654		~~651~~660
Contingencies (Note 10)
Equity
Best Buy Co., Inc. Shareholders' Equity
Preferred stock, $1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none		-		-		-
Common stock, $0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 215.0 million, 215.4 million and 217.9 million shares, respectively		22		22		22
Common stock, $0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 213.8 million, 215.4 million and 216.3 million shares, respectively		22		22		22
Additional paid-in capital		-		31		-
Retained earnings		2,~~775~~751		2,683		2,~~491~~482
Accumulated other comprehensive income		~~310~~309		317		~~322~~308
Total equity		3,~~107~~082		3,053		2,~~835~~812
Total liabilities and equity	$	1517,~~624~~018	$	14,967	$	1516,~~318~~882

NOTE: The Consolidated Balance Sheet as of February 3, 2024, has been condensed from the audited consolidated financial statements.

See Notes to Condensed Consolidated Financial Statements.

‎

Table of Contents

Condensed Consolidated Statements of Earnings

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

	Three Months Ended				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Revenue	$	9,~~288~~445	$	9,~~583~~756	$	1827,~~135~~580	$	1928,~~050~~806
Cost of sales		7,~~102~~228		7,~~363~~524		1321,~~885~~113		1422,~~680~~204
Gross profit		2,~~186~~217		2,~~220~~232		46,~~250~~467		46,~~370~~602
Selling, general and administrative expenses		1,~~810~~871		1,~~879~~878		35,~~547~~418		35,~~727~~605
Restructuring charges		(74)		~~(7)~~-		84		(16)
Operating income		~~383~~350		~~348~~354		~~695~~1,045		~~659~~1,013
Other income (expense):
Gain on sale of subsidiary, net		-		21-		-		21
Investment income and other		2119		128		4665		3341
Interest expense		(13)		(1214)		(2538)		(2438)
Earnings before income tax expense and equity in income of affiliates		~~391~~356		~~369~~348		~~716~~1,072		~~689~~1,037
Income tax expense		~~101~~85		9686		~~181~~266		~~171~~257
Equity in income of affiliates		12		1		24		-1
Net earnings	$	~~291~~273	$	~~274~~263	$	~~537~~810	$	~~518~~781
Basic earnings per share	$	1.3527	$	1.2521	$	23.4976	$	23.3758
Diluted earnings per share	$	1.3426	$	1.2521	$	23.4773	$	23.3657
Weighted-average common shares outstanding:
Basic		~~216~~214.08		~~218~~217.68		~~216~~215.17		218.74
Diluted		~~217~~216.17		~~219~~218.03		217.2		219.51

See Notes to Condensed Consolidated Financial Statements.

‎

Table of Contents

Condensed Consolidated Statements of Comprehensive Income

$ in millions (unaudited)

Three Months Ended

~~Six~~Nine Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Net earnings

~~291~~273

~~274~~263

~~537~~810

~~518~~781

Foreign currency translation adjustments, net of tax

(21)

5(14)

(78)

-(14)

Comprehensive income

~~289~~272

~~279~~249

~~530~~802

~~518~~767

See Notes to Condensed Consolidated Financial Statements.

‎

Table of Contents

Condensed Consolidated Statements of Cash Flows

$ in millions (unaudited)

	Six Months Ended
	Nine Months Ended
	August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023
Operating activities
Net earnings	$	~~537~~810	$	~~518~~781
Adjustments to reconcile net earnings to total cash provided by operating activities:
Depreciation and amortization		~~437~~650		~~473~~702
Restructuring charges		84		(16)
Stock-based compensation		74108		75110
Gain on sale of subsidiary, net		-		(21)
Other, net		123		27
Changes in operating assets and liabilities:
Receivables		664		~~289~~240
Merchandise inventories		(~~761~~2,869)		(~~508~~2,444)
Other assets		(1116)		(3217)
Accounts payable		~~904~~2,483		~~(206)~~1,468
Income taxes		(~~183~~219)		(~~148~~200)
Other liabilities		(~~266~~397)		(~~245~~320)
Total cash provided by operating activities		~~817~~561		~~181~~290
Investing activities
Additions to property and equipment		(~~335~~528)		(~~395~~612)
Net proceeds from sale of subsidiary		-		14
Other, net		~~(17)~~6		-(2)
Total cash used in investing activities		(~~352~~522)		(~~381~~600)
Financing activities
Repurchase of common stock		(~~148~~285)		(~~158~~270)
Dividends paid		(~~405~~607)		(~~402~~603)
Other, net		~~(4)~~-		-1
Total cash used in financing activities		(~~557~~892)		(~~560~~872)
Effect of exchange rate changes on cash and cash equivalents		(32)		(212)
Decrease in cash, cash equivalents and restricted cash		(95855)		(~~762~~1,194)
Cash, cash equivalents and restricted cash at beginning of period		1,793		2,253
Cash, cash equivalents and restricted cash at end of period	$	~~1,698~~938	$	1,~~491~~059

See Notes to Condensed Consolidated Financial Statements.

‎

Table of Contents

Condensed Consolidated Statements of Changes in Shareholders' Equity

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

	Common Shares		Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balances at May 4, 2024		216.1	$	22	$	26	$	2,722	$	312	$	3,082
Net earnings, three months ended August 3, 2024		-		-		-		291		-		291
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		-		-		-		-		(2)		(2)
Stock-based compensation		-		-		36		-		-		36
Issuance of common stock		-		-		1		-		-		1
Common stock dividends, $0.94 per share		-		-		4		(207)		-		(203)
Repurchase of common stock		(1.1)		-		(67)		(31)		-		(98)
Balances at August 3, 2024		215.0	$	22	$	-	$	2,775	$	310	$	3,107
Net earnings, three months ended November 2, 2024		-		-		-		273		-		273
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		-		-		-		-		(1)		(1)
Stock-based compensation		-		-		34		-		-		34
Issuance of common stock		0.2		-		6		-		-		6
Common stock dividends, $0.94 per share		-		-		4		(206)		-		(202)
Repurchase of common stock		(1.4)		-		(44)		(91)		-		(135)
Balances at November 2, 2024		213.8	$	22	$	-	$	2,751	$	309	$	3,082
Balances at February 3, 2024		215.4	$	22	$	31	$	2,683	$	317	$	3,053
Net earnings, six months ended August 3, 2024		-		-		-		537		-		537
Net earnings, nine months ended November 2, 2024		-		-		-		810		-		810
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		-		-		-		-		(78)		(78)
Stock-based compensation		-		-		74108		-		-		74108
Issuance of common stock		1.46		-		511		-		-		511
Common stock dividends, $1.88 per share		-		-		9		(414)		-		(405)
Common stock dividends, $2.82 per share		-		-		13		(620)		-		(607)
Repurchase of common stock		(13.82)		-		(~~119~~163)		(31122)		-		(~~150~~285)
Balances at August 3, 2024		215.0	$	22	$	-	$	2,775	$	310	$	3,107
Balances at November 2, 2024		213.8	$	22	$	-	$	2,751	$	309	$	3,082
Balances at April 29, 2023		218.5	$	22	$	-	$	2,454	$	317	$	2,793
Net earnings, three months ended July 29, 2023		-		-		-		274		-		274
Other comprehensive income:
Foreign currency translation adjustments, net of tax		-		-		-		-		5		5
Stock-based compensation		-		-		37		-		-		37
Issuance of common stock		0.3		-		6		-		-		6
Common stock dividends, $0.92 per share		-		-		3		(204)		-		(201)
Repurchase of common stock		(0.9)		-		(46)		(33)		-		(79)
Balances at July 29, 2023		217.9	$	22	$	-	$	2,491	$	322	$	2,835
Net earnings, three months ended October 28, 2023		-		-		-		263		-		263
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		-		-		-		-		(14)		(14)
Stock-based compensation		-		-		35		-		-		35
Issuance of common stock		0.1		-		7		-		-		7
Common stock dividends, $0.92 per share		-		-		4		(204)		-		(200)
Repurchase of common stock		(1.7)		-		(46)		(68)		-		(114)
Balances at October 28, 2023		216.3	$	22	$	-	$	2,482	$	308	$	2,812
Balances at January 28, 2023		218.1	$	22	$	21	$	2,430	$	322	$	2,795
Net earnings, six months ended July 29, 2023		-		-		-		518		-		518
Net earnings, nine months ended October 28, 2023		-		-		-		781		-		781
Stock-based compensation		-		-		75		-		-		75
Other comprehensive loss:
Issuance of common stock		1.8		-		10		-		-		10
Foreign currency translation adjustments, net of tax		-		-		-		-		(14)		(14)
Common stock dividends, $1.84 per share		-		-		7		(410)		-		(403)
Stock-based compensation		-		-		110		-		-		110
Repurchase of common stock		(2.0)		-		(113)		(47)		-		(160)
Issuance of common stock		1.9		-		17		-		-		17
Balances at July 29, 2023		217.9	$	22	$	-	$	2,491	$	322	$	2,835
Common stock dividends, $2.76 per share		-		-		11		(614)		-		(603)
Repurchase of common stock		(3.7)		-		(159)		(115)		-		(274)
Balances at October 28, 2023		216.3	$	22	$	-	$	2,482	$	308	$	2,812

See Notes to Condensed Consolidated Financial Statements.

‎

Table of Contents

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the U.S. (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024. The first ~~six~~nine months of fiscal 2025 and fiscal 2024 each included 2639 weeks.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from ~~August~~November 32, 2024, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified.

Sale of Subsidiary

In the second quarter of fiscal 2024, we completed the sale of a Mexico subsidiary subsequent to our exit from operations in Mexico and recognized a $21 million gain within Gain on sale of subsidiary, net on our Condensed Consolidated Statements of Earnings for the ~~three~~nine ~~and six~~ months ended ~~July~~October 2928, 2023.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of the ASU and expect to include updated segment expense disclosures in our fiscal 2025 Form 10-K.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of the ASU and expect to include updated income tax disclosures in our fiscal 2026 Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 Form 10-K.

Supply Chain Financing

We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution. Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $~~729~~793 million, $426 million and $~~609~~680 million as of ~~August~~November 32, 2024, February 3, 2024, and ~~July 29~~October 28, 2023, respectively.

‎

Table of Contents

Total Cash, Cash Equivalents and Restricted Cash

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

	August 3, 2024		February 3, 2024		July 29, 2023
	November 2, 2024		February 3, 2024		October 28, 2023
Cash and cash equivalents	$	~~1,387~~643	$	1,447	$	~~1,093~~636
Restricted cash included in Other current assets		~~311~~295		346		~~398~~423
Total cash, cash equivalents and restricted cash	$	~~1,698~~938	$	1,793	$	1,~~491~~059

Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities.

Table of Contents

Reclassification

Certain reclassifications of immaterial amounts previously reported have been made to the accompanying Condensed Consolidated Statements of Cash Flows to maintain consistency and comparability between periods presented.

2. Restructuring

Restructuring charges were as follows ($ in millions):

	Three Months Ended				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Fiscal 2024 Restructuring Initiative	$	(64)	$	-	$	106	$	-
Fiscal 2023 Resource Optimization Initiative		~~(1)~~-		~~(7)~~-		(2)		(16)
Total	$	(74)	$	~~(7)~~-	$	84	$	(16)

Fiscal 2024 Restructuring Initiative

During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to accomplish the following: (1) align field labor resources with where customers want to shop to optimize the customer experience; (2) redirect corporate resources for better alignment with our strategy; and (3) right-size resources to better align with our revenue outlook for fiscal 2025.

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

	Three Months Ended		~~Six~~Nine Months Ended		Cumulative Amount
	August 3, 2024		August 3, 2024		As of August 3, 2024
	November 2, 2024		November 2, 2024		As of November 2, 2024
Domestic	$	(74)	$	106	$	~~173~~169
International		1-		-		8
Total	$	(64)	$	106	$	~~181~~177

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

	Termination Benefits
	Domestic		International		Total
Balances at February 3, 2024	$	163	$	8	$	171
Charges		17		1		18
Cash payments		(6682)		(12)		(6784)
Adjustments(1)		(711)		(1)		(812)
Balances at August 3, 2024	$	107	$	7	$	114
Balances at November 2, 2024	$	87	$	6	$	93

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

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

Fiscal 2023 Resource Optimization Initiative

During the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure. All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Condensed Consolidated Statements of Earnings.

We recorded reductions to employee termination benefits in all periods presented, primarily within our Domestic segment, related to higher-than-expected employee retention. Cumulative charges incurred related to this initiative as of August 3, 2024, were $125 million, comprised of $122 million and $3 million within our Domestic and International segments, respectively. We do not expect to incur material future restructuring charges related to this initiative, and no material liability remains as of August 3, 2024.

Table of Contents

Fiscal 2023 Resource Optimization Initiative

We recorded reductions to employee termination benefits in the first nine months of fiscal 2025 and fiscal 2024, primarily within our Domestic segment, related to higher-than-expected employee retention. Cumulative charges incurred related to this initiative as of November 2, 2024, were $125 million, comprised of $122 million and $3 million within our Domestic and International segments, respectively. We do not expect to incur material future restructuring charges related to this initiative, and no material liability remains as of November 2, 2024.

3. Goodwill and Intangible Assets

Goodwill

Goodwill balances were as follows as of ~~August~~November 32, 2024, February 3, 2024, and ~~July~~October 2928, 2023 ($ in millions):


	Gross Carrying Amount		Cumulative Impairment
Domestic	$	1,450	$	(67)
International		608		(608)
Total	$	2,058	$	(675)

No impairment charges were recorded during the periods presented.

Indefinite-Lived Intangible Assets

In the second quarter of fiscal 2025, we reclassified our Yardbird tradename from a definite-lived intangible asset to an indefinite-lived intangible asset to better reflect our expectations of the long-term use of the tradename. The carrying value of the tradename was $16 million as of ~~August~~November 32, 2024, and was recorded within Other assets on our Consolidated Balance Sheets.

Definite-Lived Intangible Assets

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

	August 3, 2024				February 3, 2024				July 29, 2023
	November 2, 2024				February 3, 2024				October 28, 2023
	Gross Carrying ‎Amount		Accumulated ‎Amortization		Gross Carrying ‎Amount		Accumulated ‎Amortization		Gross Carrying ‎Amount		Accumulated ‎Amortization		Weighted-Average Useful Life Remaining ‎as of ~~August~~November 32, 2024 (in years)
Customer relationships	$	360	$	~~280~~283	$	360	$	276	$	360	$	~~264~~274		9.64
Tradenames		92		7577		108		69		108		6366		21.29
Developed technology		64		60		64		59		64		5759		3.30
Total	$	516	$	~~415~~420	$	532	$	404	$	532	$	~~384~~399		8.10

Amortization expense was as follows ($ in millions):

		Three Months Ended				~~Six~~Nine Months Ended
	Statement of Earnings Location	~~August~~November 32, 2024		~~July~~October 2928, 2023		~~August~~November 32, 2024		~~July~~October 2928, 2023
Amortization expense	Selling, general and administrative expenses	$	5	$	2115	$	1116	$	4156

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

	Amortization Expense
Remainder of fiscal 2025	$	94
Fiscal 2026		18
Fiscal 2027		16
Fiscal 2028		10
Fiscal 2029		8
Fiscal 2030		7
Thereafter		33

4. Fair Value Measurements

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).

Table of Contents

4. Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and liabilities accounted for at fair value were as follows ($ in millions):

Fair Value as of

Balance Sheet Location(1)

Fair Value Hierarchy

~~August~~November 32, 2024

February 3, 2024

~~July~~October 2928, 2023

Assets

Money market funds(2)

Cash and cash equivalents

Level 1

~~212~~40

330

~~104~~3

Time deposits(3)

Cash and cash equivalents

Level 2

~~136~~5

~~117~~26

Money market funds(2)

Other current assets

Level 1

~~147~~139

182

~~167~~170

Time deposits(3)

Other current assets

Level 2

5150

6081

Marketable securities that fund deferred compensation(4)

Other assets

Level 1

4744

Liabilities

Interest rate swap derivative instruments(5)

Long-term liabilities

Level 2

216

2036

(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):

August 3, 2024

February 3, 2024

July 29, 2023

November 2, 2024

February 3, 2024

October 28, 2023

Fair Value

Carrying Value

Fair Value

Carrying Value

Fair Value

Carrying Value

Long-term debt(1)

1,~~058~~028

1,~~148~~134

1,022

1,139

~~991~~931

1,~~130~~114

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

5. Derivative Instruments

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 $500 million of principal amount of notes due October 1, 2028. In addition, we use foreign currency forward contracts not designated as hedging instruments to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies.

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	~~August~~November 32, 2024		February 3, 2024		~~July~~October 2928, 2023
Derivatives designated as net investment hedges	$	~~103~~119	$	100	$	102
Derivatives designated as fair value hedges (interest rate swaps)		500		500		500
No hedge designation (foreign exchange contracts)		59129		66		5093
Total	$	~~662~~748	$	666	$	~~652~~695

Table of Contents

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

		Gain (Loss) Recognized
		Three Months Ended				~~Six~~Nine Months Ended
	Statement of Earnings Location	~~August~~November 32, 2024		~~July~~October 2928, 2023		~~August~~November 32, 2024		~~July~~October 2928, 2023
Interest rate swaps	Interest expense	$	24(14)	$	(1015)	$	9(5)	$	(1429)
Adjustments to carrying value of long-term debt	Interest expense		~~(24)~~14		1015		~~(9)~~5		1429
Total		$	-	$	-	$	-	$	-

6. Debt

Short-Term Debt

U.S. Revolving Credit Facility

We have a $1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2028. There were no borrowings outstanding under the Five-Year Facility Agreement as of ~~August~~November 32, 2024, February 3, 2024, or ~~July~~October 2928, 2023.

Long-Term Debt

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

	August 3, 2024		February 3, 2024		July 29, 2023
	November 2, 2024		February 3, 2024		October 28, 2023
Notes, 4.45%, due October 1, 2028	$	500	$	500	$	500
Notes, 1.95%, due October 1, 2030		650		650		650
Interest rate swap valuation adjustments		(216)		(11)		(2036)
Subtotal		1,~~148~~134		1,139		1,~~130~~114
Debt discounts and issuance costs		(7)		(8)		(98)
Finance lease obligations		29		34		39
Total long-term debt		1,~~170~~156		1,165		1,~~160~~145
Less current portion		1312		13		15
Total long-term debt, less current portion	$	1,~~157~~144	$	1,152	$	1,~~145~~130

Fair Value and Future Maturities

See Note 4, Fair Value Measurements, for the fair value of long-term debt. Other than the $500 million of principal amount of notes due October 1, 2028, we do not have any future maturities of long-term debt within the next five fiscal years.

7. Revenue

We generate substantially all of our revenue from contracts with customers from the sale of products and services. Contract balances primarily ~~consist~~relate ~~of receivables and liabilities related~~ to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, deferred revenue from our private label and co-branded credit card arrangement and unredeemed gift cards. Contract balances were as follows ($ in millions):

	August 3, 2024		February 3, 2024		July 29, 2023
	November 2, 2024		February 3, 2024		October 28, 2023
Receivables, net(1)	$	~~474~~471	$	512	$	~~485~~555
Short-term contract liabilities included in:
Unredeemed gift card liabilities		~~243~~246		253		~~250~~245
Deferred revenue		~~940~~878		1,000		~~996~~934
Accrued liabilities		6458		53		6459
Long-term contract liabilities included in:
Long-term liabilities		~~233~~237		245		~~254~~250

(1)Receivables are recorded net of allowances for expected credit losses of $16 million, $23 million and $1819 million as of ~~August~~November 32, 2024, February 3, 2024, and ~~July 29~~October 28, 2023, respectively.

During the first ~~six~~nine months of fiscal 2025 and fiscal 2024, $~~893~~1,054 million and $1,~~026~~192 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods.

Table of Contents

Estimated revenue from our contract liability balances expected to be recognized in future periods if the performance of the contract is expected to have an initial duration of more than one year is as follows ($ in millions):

Fiscal Year		Amount
Remainder of fiscal 2025	$	1710
Fiscal 2026		3335
Fiscal 2027		2730
Fiscal 2028		2526
Fiscal 2029		2526
Fiscal 2030		2526
Thereafter		~~112~~115

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

8. Earnings per Share

We compute our basic earnings per share based on the weighted-average number of common shares outstanding and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued.

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

	Three Months Ended				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Numerator
Net earnings	$	~~291~~273	$	~~274~~263	$	~~537~~810	$	~~518~~781
Denominator
Weighted-average common shares outstanding		~~216~~214.08		~~218~~217.68		~~216~~215.17		218.74
Dilutive effect of stock compensation plan awards		1.19		0.45		1.15		0.87
Weighted-average common shares outstanding, assuming dilution		~~217~~216.17		~~219~~218.03		217.2		219.51
Potential shares which were anti-dilutive and excluded from weighted-average share computations		-		10.13		-		10.34
Basic earnings per share	$	1.3527	$	1.2521	$	23.4976	$	23.3758
Diluted earnings per share	$	1.3426	$	1.2521	$	23.4773	$	23.3657

9. Repurchase of Common Stock

On February 28, 2022, our Board of Directors 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.

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

	Three Months Ended				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Total cost of shares repurchased	$	98135	$	69128	$	~~150~~285	$	~~150~~278
Average price per share	$	8295.5743	$	7671.8861	$	8087.8619	$	7674.4816
Total number of shares repurchased		1.14		01.98		13.82		23.07

As of ~~August~~November 32, 2024, $3.65 billion of the $5.0 billion share repurchase authorization was available. Between the end of the second quarter of fiscal 2025 on August 3, 2024, and September 4, 2024, we repurchased an incremental 0.4 million shares of our common stock at a cost of $39 million. We currently expect total share repurchases of approximately $500 million in fiscal 2025.

10. Contingencies

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.

‎

Table of Contents

11. Segments

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

Three Months Ended

~~Six~~Nine Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Revenue by reportable segment

Domestic

8,~~623~~697

8,~~890~~996

1625,~~826~~523

1726,~~691~~687

International

~~665~~748

~~693~~760

12,~~309~~057

12,~~359~~119

Total revenue

9,~~288~~445

9,~~583~~756

1827,~~135~~580

1928,~~050~~806

Revenue by product category

Domestic:

Computing and Mobile Phones

34,~~792~~065

3,~~674~~938

711,~~380~~445

711,~~362~~300

Consumer Electronics

2,~~478~~425

2,~~658~~589

47,~~842~~267

57,~~250~~839

Appliances

1,~~177~~057

1,~~384~~238

23,~~267~~324

23,~~723~~961

Entertainment

~~498~~479

~~544~~594

1,~~018~~497

1,~~135~~729

Services

~~590~~601

~~550~~563

1,~~168~~769

1,~~087~~650

Other

8870

8074

~~151~~221

~~134~~208

Total Domestic revenue

8,~~623~~697

8,~~890~~996

1625,~~826~~523

1726,~~691~~687

International:

Computing and Mobile Phones

~~308~~386

~~309~~378

~~626~~1,012

~~625~~1,003

Consumer Electronics

~~186~~194

~~194~~200

~~359~~553

~~378~~578

Appliances

8667

9274

~~146~~213

~~151~~225

Entertainment

3947

5054

85132

~~110~~164

Services

3847

3845

77124

74119

Other

109

1623

2130

Total International revenue

~~665~~748

~~693~~760

12,~~309~~057

12,~~359~~119

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				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Domestic	$	~~367~~337	$	~~329~~336	$	~~670~~1,007	$	~~619~~955
International		1613		1918		2538		4058
Total operating income		~~383~~350		~~348~~354		~~695~~1,045		~~659~~1,013
Other income (expense):
Gain on sale of subsidiary, net		-		21-		-		21
Investment income and other		2119		128		4665		3341
Interest expense		(13)		(1214)		(2538)		(2438)
Earnings before income tax expense and equity in income of affiliates	$	~~391~~356	$	~~369~~348	$	~~716~~1,072	$	~~689~~1,037

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

August 3, 2024

February 3, 2024

July 29, 2023

November 2, 2024

February 3, 2024

October 28, 2023

Domestic

1415,~~471~~551

13,660

1415,~~028~~395

International

1,~~153~~467

1,307

1,~~290~~487

Total assets

1517,~~624~~018

14,967

1516,~~318~~882

Table of Contents

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 53^rd 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.

Table of Contents

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 ~~second~~third quarter of fiscal 2025, we continued to manage our profitability through strong execution, ~~while~~despite atrevenue ~~the same time preparing for future growth~~declines. We made progress on our fiscal 2025 priorities, grew our paid membership base, ~~continued to implement previously announced restructuring actions~~ and drove improvements in our prioritized customer experiences. We ~~delivered~~continued to deliver sales growth in our Domestic ~~tablet~~computing and ~~computing~~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.

~~Our enterprise comparable sales declined 2.3% in the second quarter of fiscal 2025, compared to a comparable sales decline of 6.1% in the first quarter of fiscal 2025.~~ We ~~believe~~also ~~the~~continue second quarter sequential improvement in comparable sales supports our belief that this will be a year of further stabilization in the consumer electronics industry. To ensure we are in the best position possible to ~~benefit~~focus ~~from these industry developments, we are focused~~ 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.

InThis ~~the~~year, ~~second~~we ~~quarter~~have ofbeen ~~fiscal~~focused ~~2025,~~on weimproving ~~completed~~and ~~the~~refreshing ~~roll-out~~our ofApp ~~personalized~~and small view experiences – including enhanced personalization, ~~relevant~~new features like digital wallet, deal alerts and ~~motivational~~gift ~~content~~finders, toalong ~~our~~with ~~App~~a ~~users~~more tostream-lined ~~drive~~checkout ~~higher~~process ~~engagement~~and faster content loading times. ~~Each~~We ofhave grown both customer ratings for our App ~~users’~~and ~~home~~growth ~~screens~~in ~~now~~active ~~look~~users. ~~different~~We ~~based~~believe onthis ~~their~~is ~~personal~~an ~~preferences~~important ~~and~~way ato ~~number~~engage ofour ~~factors~~customers ~~like~~on ~~current~~their ~~location,~~entire shopping ~~history~~journey, ~~membership~~and ~~status~~our ~~and~~data ~~what~~shows wethat ~~know~~customers ~~they~~who ~~care~~use ~~about~~our ~~the~~App ~~most~~frequent ~~based~~us onmore ~~their~~often ~~activity.~~and thus spend more.

In our stores, we are making enhancements to every store in the chain in some fashion ~~throughout~~this ~~the second and third quarters~~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.

Table of Contents

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						~~Six~~Nine Months Ended
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Revenue	$	9,~~288~~445		$	9,~~583~~756		$	1827,~~135~~580		$	1928,~~050~~806
Revenue % change		(3.12)	%		(7.28)	%		(4.83)	%		(98.27)	%
Comparable sales % change		(2.39)	%		(6.29)	%		(43.27)	%		(87.28)	%
Gross profit	$	2,~~186~~217		$	2,~~220~~232		$	46,~~250~~467		$	46,~~370~~602
Gross profit as a % of revenue(1)		23.5	%		2322.29	%		23.4	%		22.9	%
Selling, general and administrative expense ("SG&A")	$	1,~~810~~871		$	1,~~879~~878		$	35,~~547~~418		$	35,~~727~~605
SG&A as a % of revenue(1)		19.58	%		19.62	%		19.6	%		19.65	%
Restructuring charges	$	(74)		$	~~(7)~~-		$	84		$	(16)
Operating income	$	~~383~~350		$	~~348~~354		$	~~695~~1,045		$	~~659~~1,013
Operating income as a % of revenue		43.17	%		3.6	%		3.8	%		3.5	%
Net earnings	$	~~291~~273		$	~~274~~263		$	~~537~~810		$	~~518~~781
Diluted earnings per share	$	1.3426		$	1.2521		$	23.4773		$	23.3657

(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 ~~second~~third quarter and first ~~six~~nine months of fiscal 2025, we generated $9.34 billion and $1827.16 billion in revenue, respectively, and our comparable sales ~~sequentially~~declined ~~improved from the first quarter of fiscal 2025 to a decline of~~ 2.39% and ~~a decline of 4~~3.27%, respectively, as we continued to operate in a challenged consumer electronics industry and experienced softer customer demand. ~~Despite~~While our comparable sales ~~declines~~declined in the ~~second~~third quarter of fiscal 2025 in categories such as appliances, home theater and gaming, we ~~delivered~~grew comparable sales ~~growth~~ in our ~~tablet and~~ computing ~~categories~~, ~~driven~~tablet byand ~~customers’~~services ~~desire to replace or upgrade their products combined with new product innovation~~categories.

Revenue, gross profit rate, SG&A and operating income rate changes in the ~~second~~third quarter and first ~~six~~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:

	August 3, 2024		July 29, 2023
Best Buy		890		907
Outlet Centers		26		20
Pacific Sales		20		20
Yardbird		23		22
Total Domestic stores		959		969
Canada Best Buy stores		129		128
Canada Best Buy Mobile stand-alone stores		32		32
Total International stores		161		160
Total stores		1,120		1,129

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. We currently expect to close a total of approximately 10 to 15 Domestic Best Buy stores in fiscal 2025.

Table of Contents

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 ~~increased~~was relatively unchanged in the ~~second~~third quarter of fiscal 2025~~, primarily due to an increase in pre-tax earnings~~. Our effective tax rate (“ETR”) decreased to 2523.89% in the ~~second~~third quarter of fiscal 2025 compared to 2624.17% in the ~~second~~third quarter of fiscal 2024, primarily due to increased tax benefits from green energy incentives.

Income tax expense increased in the first ~~six~~nine months of fiscal 2025, primarily due to an increase in pre-tax earnings. Our ETR ~~increased~~remained tounchanged 25at 24.38% in the first ~~six~~nine months of fiscal 2025 compared to ~~24.8% in~~ the first ~~six~~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~~, partially offset by increased tax benefits from green energy incentives~~.

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.

Table of Contents

Segment Performance Summary

Domestic Segment

Selected financial data for the Domestic segment was as follows ($ in millions):

	Three Months Ended						~~Six~~Nine Months Ended
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Revenue	$	8,~~623~~697		$	8,~~890~~996		$	1625,~~826~~523		$	1726,~~691~~687
Revenue % change		(3.03)	%		(78.12)	%		(4.94)	%		(98.18)	%
Comparable sales % change(1)		(2.38)	%		(67.3)	%		(4.3.8)	%		(8.40)	%
Gross profit	$	2,~~027~~049		$	2,~~052~~064		$	35,~~944~~993		$	46,~~044~~108
Gross profit as a % of revenue		23.56	%		2322.19	%		23.45	%		22.9	%
SG&A	$	1,~~668~~716		$	1,~~730~~727		$	34,~~266~~982		$	35,~~440~~167
SG&A as a % of revenue		19.37	%		19.52	%		19.45	%		19.4	%
Restructuring charges	$	(84)		$	~~(7)~~1		$	84		$	(1514)
Operating income	$	~~367~~337		$	~~329~~336		$	~~670~~1,007		$	~~619~~955
Operating income as a % of revenue		4.3.9	%		3.7	%		43.09	%		3.56	%
Selected Online Revenue Data
Total online revenue	$	2,~~718~~727		$	2,~~763~~754		$	57,~~243~~970		$	58,~~451~~205
Online revenue as a % of total segment revenue		31.54	%		3130.16	%		31.2	%		30.87	%
Comparable online sales % change(1)		(1.60)	%		(79.13)	%		(32.89)	%		(9.75)	%

(1)Comparable online sales are included in the comparable sales calculation.

Domestic revenue decreased in the ~~second~~third quarter ~~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 tablets, computing and services categories. In the~~ first ~~six~~nine months of fiscal 2025, ~~Domestic revenue decreased,~~ primarily driven by comparable sales declines in the appliances, home theater and gaming categories, partially offset by comparable sales growth in the ~~services~~computing, tablets and ~~computing~~services categories. Online revenue of $2.7 billion and $58.20 billion in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2025 decreased 1.60% and 32.89%, 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
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Computing and Mobile Phones		4447	%		4144	%		3.98	%		(68.43)	%
Consumer Electronics		2928	%		3029	%		(65.28)	%		(59.75)	%
Appliances		1312	%		1614	%		(14.97)	%		(1615.1)	%
Entertainment		65	%		6	%		(718.48)	%		920.06	%
Services		7	%		6	%		86.50	%		7.6.9	%
Other		1	%		1	%		1412.49	%		2.4.7	%
Total		100	%		100	%		(2.38)	%		(67.3)	%

Table of Contents

Notable comparable sales changes by revenue category were as follows:

Computing and Mobile Phones: The 3.98% comparable sales growth was driven primarily by ~~tablets~~computing and ~~computing, partially offset by a comparable sales decline in mobile phones~~tablets.

Consumer Electronics: The 65.28% comparable sales decline was driven primarily by home theater.

Appliances: The 14.97% comparable sales decline was driven primarily by large appliances.

Entertainment: The 718.48% comparable sales decline was driven primarily by gaming.

Services: The 86.50% 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 ~~second~~third quarter ~~and first six 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 and lower product margin rates.

Domestic ~~SG&A~~gross ~~decreased~~profit rate increased in the ~~second~~first ~~quarter~~nine months of fiscal 2025, primarily due to ~~lower~~improved ~~employee~~financial ~~compensation~~performance ~~expense~~from ~~and~~our ~~lower~~services ~~expenses~~category, ~~across~~including ~~multiple~~our ~~other~~membership ~~areas~~offerings, ~~including~~which ~~reduced~~was ~~vehicle~~partially ~~rental~~offset ~~costs~~by ~~and~~lower ~~credit~~product ~~card~~margin ~~processing~~rates ~~fees.~~and ~~These~~lower ~~decreases~~profit-sharing ~~were~~revenue ~~partially~~from ~~offset~~our byprivate ~~higher~~label ~~advertising~~and ~~expense.~~co-branded credit card arrangement.

Domestic SG&A decreased in the ~~first~~third ~~six~~quarter ~~months~~ of fiscal 2025, primarily due to lower employee compensation expense, ~~which was primarily store payroll,~~ and lower ~~expenses~~intangible ~~across~~asset ~~multiple~~amortization ~~other areas~~expense, ~~including reduced vehicle rental costs. These decreases were~~ partially offset by higher advertising ~~and technology~~ expense.

Domestic ~~restructuring~~SG&A ~~charges~~decreased in the ~~second quarter and~~ first ~~six~~nine months of fiscal 2025, ~~were~~ primarily ~~related~~due to ~~employee~~lower ~~termination benefits and subsequent adjustments from higher-than-expected~~ employee ~~retention~~compensation ~~associated~~expense, ~~with~~which anwas ~~enterprise-wide~~primarily ~~restructuring~~store ~~initiative~~payroll, ~~that~~lower ~~commenced~~intangible inamortization ~~the~~expense ~~fourth~~and ~~quarter~~reduced ofvehicle ~~fiscal~~rental ~~2024~~costs. ~~Refer~~These todecreases ~~Note~~were 2,partially ~~Restructuring,~~offset ofby ~~the~~higher ~~Notes~~advertising toand ~~Condensed~~technology ~~Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for additional information~~expense.

~~Domestic operating income rate increased in the second quarter and first six months of fiscal 2025, primarily due to favorability in the gross profit rate.~~ 19

Table of Contents

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						~~Six~~Nine Months Ended
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Revenue	$	~~665~~748		$	~~693~~760		$	12,~~309~~057		$	12,~~359~~119
Revenue % change		(41.06)	%		(83.84)	%		(32.79)	%		(107.29)	%
Comparable sales % change		(13.87)	%		(51.49)	%		(23.60)	%		(54.52)	%
Gross profit	$	~~159~~168		$	168		$	~~306~~474		$	~~326~~494
Gross profit as a % of revenue		2322.95	%		2422.21	%		23.40	%		2423.03	%
SG&A	$	~~142~~155		$	~~149~~151		$	~~281~~436		$	~~287~~438
SG&A as a % of revenue		2120.47	%		2119.59	%		21.52	%		2120.17	%
Operating income	$	1613		$	1918		$	2538		$	4058
Operating income as a % of revenue		21.47	%		2.74	%		1.98	%		2.97	%

International revenue decreased in the ~~second~~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. ~~and~~These ~~comparable~~decreases ~~sales~~were ~~declines in gaming and computing,~~ partially offset by ~~comparable~~increased ~~sales~~revenue ~~growth~~from inBest ~~mobile~~Buy ~~phones~~Express locations.

International revenue decreased in the first ~~six~~nine months of fiscal 2025, primarily driven by comparable sales declines in gaming, computing and ~~computing~~home theater, as well as the negative impact of foreign exchange rates. These ~~drivers~~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
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Computing and Mobile Phones		4652	%		4550	%		1(0.71)	%		(21.40)	%
Consumer Electronics		2826	%		2826	%		(26.1)	%		(108.4)	%
Appliances		139	%		1310	%		(38.91)	%		(64.1)0	%
Entertainment		6	%		7	%		(2018.87)	%		218.56	%
Services		6	%		56	%		54.90	%		42.64	%
Other		1	%		21	%		(2012.17)	%		(3837.15)	%
Total		100	%		100	%		(13.87)	%		(51.49)	%

Table of Contents

Notable comparable sales changes by revenue category were as follows:

Computing and Mobile Phones: The 10.71% comparable sales ~~growth~~decline was driven primarily by ~~mobile~~computing ~~phones~~and tablets, partially offset by a comparable sales ~~decline~~growth in ~~computing~~mobile phones.

Consumer Electronics: The 26.1% comparable sales decline was driven primarily by home theater and home automation.

Appliances: The 38.91% comparable sales decline was driven ~~primarily~~ by both large and small appliances.

Entertainment: The 2018.87% comparable sales decline was driven primarily by gaming~~, partially offset by comparable sales growth in virtual reality~~.

Services: The 54.90% comparable sales growth was driven primarily by growth in our membership programs.

International gross profit rate ~~decreased~~increased in the ~~second~~third quarter ~~and first six 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~~gross profit rate decreased in the ~~second~~first ~~quarter~~nine months of fiscal 2025, primarily driven by ~~the~~lower ~~favorable~~product ~~impact~~margin ~~of foreign exchange~~ rates and ~~lower~~higher ~~advertising~~supply ~~expense~~chain costs, which ~~was~~were partially offset by ~~expenses~~growth ~~associated~~in ~~with~~the ~~new~~higher ~~Best~~margin ~~Buy~~services ~~Express locations as a result of our previously announced collaboration with Bell Canada~~category.

International SG&A ~~decreased~~increased in the ~~first~~third ~~six~~quarter ~~months~~ of fiscal 2025, primarily driven by ~~the favorable impact of foreign exchange rates, lower advertising expense and lower employee compensation expense, which was primarily incentive compensation. These drivers were partially offset by~~ expenses associated with new Best Buy Express locations ~~and higher technology expense~~.

~~International operating income rate decreased in the second quarter of fiscal 2025, primarily due to an unfavorable gross profit rate.~~20

~~International~~Table ~~operating income rate decreased in the first six months~~ of ~~fiscal 2025, primarily due to an unfavorable gross profit rate and decreased leverage from lower sales volume on our fixed expenses, which resulted in an unfavorable SG&A rate.~~Contents

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						~~Six~~Nine Months Ended
	August 3, 2024			July 29, 2023			August 3, 2024			July 29, 2023
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Operating income	$	~~383~~350		$	~~348~~354		$	~~695~~1,045		$	~~659~~1,013
% of revenue		43.17	%		3.6	%		3.8	%		3.5	%
Intangible asset amortization(1)		5			2115			1116			4156
Restructuring charges(2)		(74)			~~(7)~~-			84			(16)
Non-GAAP operating income	$	~~381~~351		$	~~362~~369		$	~~714~~1,065		$	~~684~~1,053
% of revenue		43.17	%		3.8	%		3.9	%		3.67	%
Effective tax rate		2523.89	%		2624.17	%		2524.38	%		24.8	%
Intangible asset amortization(1)		-(0.1)	%		~~(0.4)~~-	%		-	%		0.42	%
Restructuring charges(2)		-	%		~~0.4~~-	%		-	%		(0.1)	%
Loss on investments		-	%		0.5	%		-	%		-	%
Non-GAAP effective tax rate		23.8	%		24.7	%		24.8	%		24.9	%
Non-GAAP effective tax rate		25.8	%		26.6	%		25.3	%		25.1	%
Diluted EPS	$	1.26		$	1.21		$	3.73		$	3.57
Diluted EPS	$	1.34		$	1.25		$	2.47		$	2.36
Intangible asset amortization(1)		0.02			0.07			0.07			0.25
Intangible asset amortization(1)		0.03			0.10			0.05			0.18
Restructuring charges(2)		(0.02)			-			0.02			(0.07)
Restructuring charges(2)		(0.03)			(0.03)			0.04			(0.07)
Loss on investments		-			0.04			-			0.05
Loss on investments		-			-			-			0.02
Gain on sale of subsidiary, net(3)		-			-			-			(0.10)
Gain on sale of subsidiary, net(3)		-			(0.10)			-			(0.10)
Income tax impact of non-GAAP adjustments(4)		-			(0.03)			(0.02)			(0.04)
Income tax impact of non-GAAP adjustments(4)		-			-			(0.02)			(0.02)
Non-GAAP diluted EPS	$	1.26		$	1.29		$	3.80		$	3.66
Non-GAAP diluted EPS	$	1.34		$	1.22		$	2.54		$	2.37

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 ~~charge~~ 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.

20Non-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.

‎

Table of Contents

Non-GAAP operating income rate increased in the second quarter and first six months of fiscal 2025, primarily due to a favorable gross profit rate in our Domestic segment.

Non-GAAP effective tax rate decreased in the second quarter of fiscal 2025, primarily due to increased tax benefits from green energy incentives. Non-GAAP effective tax rate increased in the first six months of fiscal 2025, primarily due to reduced tax benefits from the resolution of tax matters and stock-based compensation, partially offset by increased tax benefits from green energy incentives.

Non-GAAP diluted EPS increased in the second quarter and first six months of fiscal 2025, primarily due to the increase in non-GAAP operating income.

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):

August 3, 2024

February 3, 2024

July 29, 2023

November 2, 2024

February 3, 2024

October 28, 2023

Cash and cash equivalents

~~1,387~~643

1,447

~~1,093~~636

The decrease in cash and cash equivalents from February 3, 2024, was primarily due to dividend payments, ~~and~~ 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 ~~July~~October 2928, 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):

Six Months Ended

Nine Months Ended

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

Total cash provided by (used in):

Operating activities

~~817~~561

~~181~~290

Investing activities

(~~352~~522)

(~~381~~600)

Financing activities

(~~557~~892)

(~~560~~872)

Effect of exchange rate changes on cash and cash equivalents

(32)

(212)

Decrease in cash, cash equivalents and restricted cash

(95855)

(~~762~~1,194)

Operating Activities

The increase in cash provided by operating activities in the first ~~six~~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 ~~six~~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

~~Cash~~The increase in cash used in financing activities in the first ~~six~~nine months of fiscal 2025 ~~remained~~was ~~relatively~~primarily ~~consistent~~driven ~~with~~by ~~the~~higher ~~comparable~~share ~~prior-year period~~repurchases.

Table of Contents

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.

Table of Contents

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 $~~311~~295 million, $346 million and $~~398~~423 million at ~~August~~November 32, 2024, February 3, 2024, and ~~July~~October 2928, 2023, respectively. The decrease in restricted cash from February 3, 2024, and ~~July 29~~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 ~~August~~November 32, 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				~~Six~~Nine Months Ended
	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Total cost of shares repurchased	$	98135	$	69128	$	~~150~~285	$	~~150~~278
Average price per share	$	8295.5743	$	7671.8861	$	8087.8619	$	7674.4816
Total number of shares repurchased		1.14		01.98		13.82		23.07
Regular quarterly cash dividend per share	$	0.94	$	0.92	$	12.8882	$	12.8476
Cash dividends declared and paid	$	~~203~~202	$	~~200~~201	$	~~405~~607	$	~~402~~603

The total cost of shares repurchased increased in the ~~second~~third quarter and first nine months of fiscal 2025, primarily due to an increase in the ~~volume~~average ofprice ~~repurchases.~~per ~~The~~share, ~~total~~partially ~~cost~~offset ofby ~~shares~~a ~~repurchased remained consistent in the first six months of fiscal 2025, as the~~ decrease in the volume of repurchases. ~~was~~We ~~offset~~currently byexpect ~~the~~total ~~increase in the average price per~~ share. ~~Cash~~repurchases ~~dividends declared and paid increased during the second quarter and first six months~~ of ~~fiscal~~up ~~2025, due~~ to ~~the~~$500 ~~increase~~million in ~~the~~fiscal ~~regular quarterly cash dividend per share, partially offset by fewer shares outstanding~~2025.

~~Between~~Cash ~~the~~dividends ~~end~~declared ofand ~~the~~paid ~~second~~increased ~~quarter~~during ofthe ~~fiscal~~third ~~2025~~quarter ~~on August 3, 2024,~~ and ~~September~~first 4,nine ~~2024,~~months ~~we repurchased an incremental 0.4 million shares~~ of ~~our~~fiscal ~~common~~2025, ~~stock~~due atto athe ~~cost~~increase ofin ~~$39~~the ~~million.~~regular Wequarterly ~~currently~~cash ~~expect~~dividend ~~total~~per share, ~~repurchases~~partially ofoffset ~~approximately~~by ~~$500~~fewer ~~million~~shares ~~in fiscal 2025~~outstanding.

Table of Contents

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 ~~August~~November 32, 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.

‎

Table of Contents

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, or 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.

Table of Contents

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 August 3, 2024, we had $1.7 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 $1.2 billion. As of August 3, 2024, a 50-basis point increase in short-term interest rates would have led to an estimated $6 million increase in interest income, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated $6 million decrease in interest income.

Table of Contents

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 ~~second~~third quarter and first ~~six~~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 $186 million and $1925 million in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2025, respectively. The impact of foreign exchange rate fluctuations on our net earnings in the ~~second~~third quarter and first ~~six~~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 ~~August~~November 32, 2024. Based on that evaluation, our Chief Executive Officer and Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer concluded that, at ~~August~~November 32, 2024, our disclosure controls and procedures were effective.

There were no changes in internal control over financial reporting during the fiscal quarter ended ~~August~~November 32, 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.

Table of Contents

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.

Fiscal Period	Total Number of‎Shares Purchased	Average Price Paid‎per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
May 5, 2024 through June 1, 2024	389,162	$	74.00		389,162	$	3,703,000,000
August 4, 2024 through August 31, 2024	376,830	$	86.40		376,830	$	3,602,000,000
June 2, 2024 through July 6, 2024	433,510	$	86.81		433,510	$	3,666,000,000
September 1, 2024 through October 5, 2024	736,070	$	99.08		736,070	$	3,529,000,000
July 7, 2024 through August 3, 2024	360,052	$	86.73		360,052	$	3,635,000,000
October 6, 2024 through November 2, 2024	306,831	$	97.77		306,831	$	3,499,000,000
Total fiscal 2025 second quarter	1,182,724	$	82.57		1,182,724	$	3,635,000,000
Total fiscal 2025 third quarter	1,419,731	$	95.43		1,419,731	$	3,499,000,000

Table of Contents

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 ~~August 3~~November 2, 2024.

On ~~June 6~~September 12, 2024, ~~Corie~~Matthew ~~Barry~~Bilunas, the Company’s ~~Chief~~Senior Executive ~~Officer~~Vice President of Enterprise Strategy and aChief ~~director~~Financial Officer, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, providing for the potential sale of up to 7969,~~829~~116 shares of our common stock through ~~September 17~~May 30, ~~2024~~2025.

Item 6.Exhibits

3.1	Amended and Restated Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Best Buy Co., Inc. on June 12, 2020).
3.2	Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Best Buy Co., Inc. on June 14, 2018).
10.1*	Form of Best Buy Co., Inc. Long-Term Incentive Program Award Agreement (2024) – Directors.
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(1).
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(1).
101	The following financial information from our Quarterly Report on Form 10-Q for the ~~second~~third quarter of fiscal 2025, filed with the SEC on ~~September~~December 6, 2024, formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) the Condensed Consolidated Balance Sheets as of ~~August~~November 32, 2024, February 3, 2024, and ~~July~~October 2928, 2023, (ii) the Condensed Consolidated Statements of Earnings for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023, (iv) the Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023, (v) the Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and ~~six~~nine months ended ~~August~~November 32, 2024, and ~~July~~October 2928, 2023, and (vi) the Notes to Condensed Consolidated Financial Statements.
104	The cover page from our Quarterly Report on Form 10-Q for the ~~second~~third quarter of fiscal 2025, filed with the SEC on ~~September~~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.

* Management contracts or compensatory plans or arrangements

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.

‎

2526

Table of Contents

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.

	BEST BUY CO., INC.
	(Registrant)
Date: September 6, 2024	By:	/s/ CORIE BARRY
Date: December 6, 2024	By:	/s/ CORIE BARRY
		Corie Barry
		Chief Executive Officer
Date: September 6, 2024	By:	/s/ MATTHEW BILUNAS
Date: December 6, 2024	By:	/s/ MATTHEW BILUNAS
		Matthew Bilunas
		Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer
Date: September 6, 2024	By:	/s/ MATHEW R. WATSON
Date: December 6, 2024	By:	/s/ MATHEW R. WATSON
		Mathew R. Watson
		Senior Vice President, Finance – Controller and Chief Accounting Officer

2627

Filing Compare · BEST BUY CO INC