Enterprise Comparable Sales Increased 4.3%
GAAP Diluted EPS Increased 27% to $0.99
Non-GAAP Diluted EPS Increased 19% to $0.93
Closes acquisition of GreatCall
Raises FY19 Financial Guidance
MINNEAPOLIS--(BUSINESS WIRE)--
Best Buy Co., Inc. (NYSE: BBY) today announced results for the third
quarter ended November 3, 2018 (“Q3 FY19”), as compared to the third
quarter ended October 28, 2017 (“Q3 FY18”).
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Q3 FY19
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Q3 FY18
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Revenue ($ in millions):
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Enterprise
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$9,590
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$9,320
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Domestic segment
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$8,756
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$8,491
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International segment
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$834
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$829
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Enterprise comparable sales % change
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4.3%
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4.4%
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Domestic comparable sales % change
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4.3%
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4.5%
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Domestic comparable online sales % change
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12.6%
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22.3%
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International comparable sales % change
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3.7%
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3.8%
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Operating Income:
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GAAPoperating income as a % of revenue
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3.4%
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3.8%
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Non-GAAPoperating income as a % of revenue
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3.5%
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3.7%
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Diluted Earnings per Share ("EPS"):
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GAAP diluted EPS
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$0.99
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$0.78
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Non-GAAP diluted EPS
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$0.93
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$0.78
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For GAAP to non-GAAP reconciliations, please refer to the attached
supporting schedule titled Reconciliation of Non-GAAP Financial Measures.
“Our team just delivered another strong quarter with 4.3% comparable
sales growth and better-than-expected earnings growth,” said Hubert
Joly, Best Buy chairman and CEO. “Similar to the first half of the year,
our topline performance was helped by a favorable environment and driven
by how customers are responding to the unique and elevated experience we
are building. We have continued to make significant progress against our
Best Buy 2020: Building the New Blue strategy, including expanding our
In-Home Advisor program, growing our Total Tech Support members and
completing the acquisition of GreatCall, a leading connected health
services provider for aging consumers. We are energized by our continued
momentum and overall performance and see significant value-generation
opportunity ahead of us by successfully enriching lives with technology
and providing services and solutions that solve real customer needs.”
Joly continued, “The holiday season is here, and our team has put
together a best-in-class assortment, prepared an amazing set of deals,
and ensured we have great inventory availability across all the product
categories we carry. In addition, we have continued to enhance our
digital shopping experience and further improved our shipping speed,
allowing us to delight customers with fast and free delivery. Customers
can come to us online and use our Gift Center or talk to any of our Blue
Shirt Associates, Geek Squad Agents or In-Home Advisors for help finding
the perfect gift for everyone on their list this holiday.”
Best Buy CFO Corie Barry commented, “We are raising our full-year
guidance for revenue and EPS to reflect the outperformance in the third
quarter. Our guidance for Q4 is consistent with the expectations that
were implied in the full-year guidance we provided last quarter. We
expect comparable sales growth to be flat to up 3% and non-GAAP EPS in
the range of $2.48 to $2.58.”
FY19 Financial Guidance
Note: FY19 has 52 weeks compared to 53 weeks in FY18. The extra week
occurred in Q4 FY18 and was approximately $760 million in revenue and
approximately $0.20 of non-GAAP diluted EPS.
Best Buy is raising its full-year FY19 financial outlook to the
following:
-
Enterprise revenue of $42.5 billion to $42.9 billion
-
Enterprise comparable sales growth of 4.0% to 5.0%1
-
Enterprise non-GAAP operating income rate of approximately 4.5%2,
flat to FY18 on a 52-week basis
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Non-GAAP effective income tax rate of approximately 24.0%2
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Non-GAAP diluted EPS of $5.09 to $5.192, growth of 15% to
17%, versus previous guidance of $4.95 to $5.10
Best Buy is providing the following Q4 FY19 financial outlook:
-
Enterprise revenue of $14.4 billion to $14.8 billion
-
Enterprise comparable sales growth of 0.0% to 3.0%
-
Domestic comparable sales growth of 0.0% to 3.0%
-
International comparable sales growth of 0.0% to 3.0%
-
Non-GAAP effective income tax rate of approximately 25.0%2
-
Diluted weighted average share count of approximately 275 million
-
Non-GAAP diluted EPS of $2.48 to $2.582
Domestic Segment Q3 FY19 Results
Domestic Revenue
Domestic revenue of $8.76 billion increased
3.1% versus last year, driven by comparable sales growth of 4.3%,
partially offset by the loss of revenue from 287 Best Buy Mobile and 19
large-format store closures over the past year. The comparable sales
growth of 4.3% included an approximate 70-basis point negative impact
from a calendar shift resulting from the extra week in FY18.
From a merchandising perspective, the company generated comparable sales
growth across multiple categories, with the largest drivers being mobile
phones, gaming, appliances, wearables, headphones and smart home. These
positive drivers were partially offset by a decline in the tablet
category.
Domestic online revenue of $1.21 billion increased 12.6% on a comparable
basis, primarily due to higher conversion rates and increased traffic.
As a percentage of total Domestic revenue, online revenue increased 110
basis points to 13.8% versus 12.7% last year.
Domestic Gross Profit Rate
Domestic gross profit rate was
24.4% versus 24.7% last year. The gross profit rate decline of
approximately 30 basis points was driven primarily by higher supply
chain costs, including both investments and higher transportation costs,
and the national rollout of the Total Tech Support offer. These
pressures were partially offset by improved product margin rates, which
included the benefit of gross profit optimization initiatives.
Domestic Selling, General and Administrative Expenses (“SG&A”)
Domestic
GAAP SG&A expenses were $1.82 billion, or 20.8% of revenue, versus $1.75
billion, or 20.6% of revenue, last year. On a non-GAAP basis, SG&A
expenses were $1.81 billion, or 20.6% of revenue, versus $1.75 billion,
or 20.6% of revenue, last year. Both GAAP and non-GAAP SG&A increased
primarily due to: (1) growth investments, including specialty labor and
depreciation; (2) higher incentive compensation; (3) GreatCall operating
expenses; and (4) higher variable costs due to increased revenue. These
increases were partially offset by cost reductions. Additionally, GAAP
SG&A expenses in Q3 FY19 were higher by $18 million due to expenses
related to the GreatCall acquisition, which included $13 million related
to one-time transaction costs and $5 million related to the amortization
of intangible assets.
International Segment Q3 FY19 Results
International Revenue
International revenue of $834 million
increased 0.6% versus last year. This increase was primarily driven by
comparable sales growth of 3.7%, due to both Canada and Mexico, and
sales from six new large-format store locations opened in Mexico in the
past year. These items were partially offset by approximately 460 basis
points of negative foreign currency impact.
International Gross Profit Rate
International gross profit
rate of 22.2% was flat to last year.
International SG&A
International SG&A was $178 million,
or 21.3% of revenue, versus $181 million, or 21.8% of revenue, last
year. SG&A decreased primarily due to the favorable impact of foreign
exchange rates.
GreatCall Acquisition
On October 1, 2018, the company completed the acquisition of GreatCall,
Inc. for net cash consideration of $792 million. GreatCall financial
results are consolidated and reported within the Domestic segment for
the approximately five-week stub period.
Dividends and Share Repurchases
In Q3 FY19, the company returned a total of $493 million to shareholders
through dividends of $123 million and share repurchases of $370 million,
or 4.8 million shares. On a year-to-date basis, the company has returned
a total of $1.52 billion to shareholders through dividends of $376
million and share repurchases of $1.14 billion, or 15.4 million shares.
On March 1, 2018, the company announced the intent to spend $1.5 billion
on share repurchases during FY19.
Income Taxes
In Q3 FY19, the GAAP effective tax rate was 16.1% versus 30.4% last
year. On a non-GAAP basis, the effective tax rate was 22.7% versus 30.4%
last year. Both the GAAP and non-GAAP effective tax rates were lower due
to the impacts from the Tax Cuts and Jobs Act of 2017, which included a
reduction in the U.S. statutory corporate tax rate, partially offset by
a decrease in excess tax benefits associated with stock-based
compensation recorded in the current year period. Additionally, the GAAP
effective tax rate included a benefit of approximately 690 basis points
due to adjustments made to provisional tax expense recorded in Q4 FY18
associated with the enactment of the Tax Cuts and Jobs Act.
Conference Call
Best Buy is scheduled to conduct an earnings conference call at 10:00
a.m. Eastern Time (9:00 a.m. Central Time) on November 20, 2018. A
webcast of the call is expected to be available at www.investors.bestbuy.com,both live and after the call.
Notes:
(1) On March 1, 2018, the company announced its
intent to close all of the remaining 257 Best Buy Mobile stand-alone
stores in the U.S. As a result, all revenue related to these stores has
been excluded from the comparable sales calculation beginning in March
2018.
(2) A reconciliation of the projected non-GAAP operating income,
non-GAAP effective income tax rate and non-GAAP diluted EPS, which are
forward-looking non-GAAP financial measures, to the most directly
comparable GAAP financial measures, is not provided because the company
is unable to provide such reconciliation without unreasonable effort.
The inability to provide a reconciliation is due to the uncertainty and
inherent difficulty predicting the occurrence, the financial impact and
the periods in which the non-GAAP adjustments may be recognized. These
GAAP measures may include the impact of such items as restructuring
charges; litigation settlements; goodwill impairments; gains and losses
on investments; certain acquisition-related costs; and the tax effect of
all such items. Historically, the company has excluded these items from
non-GAAP financial measures. The company currently expects to continue
to exclude these items in future disclosures of non-GAAP financial
measures and may also exclude other items that may arise (collectively,
“non-GAAP adjustments”). The decisions and events that typically lead to
the recognition of non-GAAP adjustments, such as a decision to exit part
of the business or reaching settlement of a legal dispute, are
inherently unpredictable as to if or when they may occur. For the same
reasons, the company is unable to address the probable significance of
the unavailable information, which could be material to future results.
Forward-Looking and Cautionary Statements:
This earnings
release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 as contained in Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that reflect management’s current views and
estimates regarding future market conditions, company performance and
financial results, operational investments, business prospects, new
strategies, the competitive environment and other events. You can
identify these statements by the fact that they use words such as
“anticipate,” “believe,” “assume,” “estimate,” “expect,” “intend,”
“project,” “guidance,” “plan,” “outlook,” and other words and terms of
similar meaning. These statements involve a number of risks and
uncertainties that could cause actual results to differ materially from
the potential results discussed in the forward-looking statements. Among
the factors that could cause actual results and outcomes to differ
materially from those contained in such forward-looking statements are
the following: macro-economic conditions (including fluctuations in
housing prices, oil markets and jobless rates), conditions in the
industries and categories in which the company operates, changes in
consumer preferences or confidence, changes in consumer spending and
debt levels, the mix of products and services offered for sale in our
physical stores and online, credit market changes and constraints,
product availability, trade restrictions or changes in the costs of
imports (including existing or new tariffs or duties and changes in the
amount of any such tariffs or duties), competitive initiatives of
competitors (including pricing actions and promotional activities),
strategic and business decisions of our vendors (including actions that
could impact promotional support, product margin and/or supply), the
success of new product launches, the impact of pricing investments and
promotional activity, weather, natural or man-made disasters, attacks on
our data systems, the company’s ability to prevent or react to a
disaster recovery situation, changes in law or regulations, changes in
tax rates, changes in taxable income in each jurisdiction, tax audit
developments and resolution of other discrete tax matters, the effects
of tax reform, foreign currency fluctuation, the company’s ability to
manage its property portfolio, the impact of labor markets, the
company’s ability to retain qualified employees and management, failure
to achieve anticipated expense and cost reductions, disruptions in our
supply chain, the costs of procuring goods the company sells, failure to
achieve anticipated revenue and profitability increases from operational
and restructuring changes (including investments in our multi-channel
capabilities), inability to secure or maintain favorable vendor terms,
failure to accurately predict the duration over which the company will
incur costs, development of new businesses, failure to complete or
achieve anticipated benefits of acquisitions or other transactions
(including our recent acquisition of GreatCall), including, with respect
to such transactions, the risks that revenues following the transactions
may be lower than expected, operating costs, customer loss, and business
disruption (including, without limitation, difficulties in maintaining
relationships with employees, customers, and suppliers) may be greater
than expected and the risk that the company may assume unexpected risks
and liabilities, and our ability to protect information relating to our
employees and customers. A further list and description of these risks,
uncertainties and other matters can be found in the company’s annual
report and other reports filed from time to time with the Securities and
Exchange Commission (“SEC”), including, but not limited to, Best Buy’s
Report on Form 10-K filed with the SEC on April 2, 2018. Best Buy
cautions that the foregoing list of important factors is not complete,
and any forward-looking statements speak only as of the date they are
made, and Best Buy assumes no obligation to update any forward-looking
statement that it may make.
BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
($ and shares in millions, except per share amounts)
(Unaudited
and subject to reclassification)
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Three Months Ended
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Nine Months Ended
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November 3,
2018
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October 28,
2017
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November 3,
2018
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October 28,
2017
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Revenue
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$
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9,590
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$
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9,320
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$
|
28,078
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$
|
26,788
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|
Cost of goods sold
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7,266
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|
|
|
7,040
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21,400
|
|
|
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20,333
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Gross profit
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2,324
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|
|
2,280
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6,678
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|
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6,455
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Gross profit %
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24.2
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%
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|
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24.5
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%
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|
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23.8
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%
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|
|
24.1
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%
|
|
Selling, general and administrative expenses
|
|
|
2,002
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|
|
|
1,932
|
|
|
|
5,709
|
|
|
|
5,484
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|
|
SG&A %
|
|
|
20.9
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%
|
|
|
20.7
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%
|
|
|
20.3
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%
|
|
|
20.5
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%
|
|
Restructuring charges
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
47
|
|
|
|
—
|
|
|
Operating income
|
|
|
322
|
|
|
|
350
|
|
|
|
922
|
|
|
|
971
|
|
|
Operating income %
|
|
|
3.4
|
%
|
|
|
3.8
|
%
|
|
|
3.3
|
%
|
|
|
3.6
|
%
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Gain on sale of investments
|
|
|
12
|
|
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
|
Investment income and other
|
|
|
11
|
|
|
|
12
|
|
|
|
35
|
|
|
|
30
|
|
|
Interest expense
|
|
|
(15
|
)
|
|
|
(20
|
)
|
|
|
(53
|
)
|
|
|
(57
|
)
|
|
Earnings before income tax expense
|
|
|
330
|
|
|
|
342
|
|
|
|
916
|
|
|
|
944
|
|
|
Income tax expense
|
|
|
53
|
|
|
|
104
|
|
|
|
187
|
|
|
|
309
|
|
|
Effective tax rate
|
|
|
16.1
|
%
|
|
|
30.4
|
%
|
|
|
20.4
|
%
|
|
|
32.7
|
%
|
|
Net earnings from continuing operations
|
|
$
|
277
|
|
|
$
|
238
|
|
|
$
|
729
|
|
|
$
|
635
|
|
|
Gain from discontinued operations, net of tax
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net earnings
|
|
$
|
277
|
|
|
$
|
239
|
|
|
$
|
729
|
|
|
$
|
636
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
1.01
|
|
|
$
|
0.80
|
|
|
$
|
2.62
|
|
|
$
|
2.09
|
|
|
Diluted earnings per share
|
|
$
|
0.99
|
|
|
$
|
0.78
|
|
|
$
|
2.57
|
|
|
$
|
2.05
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
$
|
1.35
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
274.3
|
|
|
|
299.1
|
|
|
|
278.6
|
|
|
|
304.1
|
|
|
Diluted
|
|
|
279.3
|
|
|
|
305.4
|
|
|
|
283.8
|
|
|
|
310.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEST BUY CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($
in millions)
(Unaudited and subject to reclassification)
|
|
|
|
|
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,228
|
|
$
|
1,103
|
|
Short-term investments
|
|
|
76
|
|
|
2,237
|
|
Receivables, net
|
|
|
921
|
|
|
971
|
|
Merchandise inventories
|
|
|
8,168
|
|
|
6,663
|
|
Other current assets
|
|
|
508
|
|
|
431
|
|
Total current assets
|
|
|
10,901
|
|
|
11,405
|
|
Property and equipment, net
|
|
|
2,525
|
|
|
2,352
|
|
Goodwill
|
|
|
921
|
|
|
425
|
|
Other assets
|
|
|
653
|
|
|
603
|
|
Total assets
|
|
$
|
15,000
|
|
$
|
14,785
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
7,964
|
|
$
|
6,587
|
|
Unredeemed gift card liabilities
|
|
|
281
|
|
|
375
|
|
Deferred revenue
|
|
|
449
|
|
|
426
|
|
Accrued compensation and related expenses
|
|
|
349
|
|
|
331
|
|
Accrued liabilities
|
|
|
844
|
|
|
888
|
|
Current portion of long-term debt
|
|
|
46
|
|
|
545
|
|
Total current liabilities
|
|
|
9,933
|
|
|
9,152
|
|
Long-term liabilities
|
|
|
775
|
|
|
697
|
|
Long-term debt
|
|
|
1,280
|
|
|
784
|
|
Equity
|
|
|
3,012
|
|
|
4,152
|
|
Total liabilities and equity
|
|
$
|
15,000
|
|
$
|
14,785
|
|
|
|
|
|
|
|
BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
($ in millions)
(Unaudited and subject to
reclassification)
|
|
|
|
|
Nine Months Ended
|
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Operating activities
|
|
|
|
|
|
Net earnings
|
|
$
|
729
|
|
|
$
|
636
|
|
|
Adjustments to reconcile net earnings to total cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
550
|
|
|
|
500
|
|
|
Restructuring charges
|
|
|
47
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
92
|
|
|
|
97
|
|
|
Deferred income taxes
|
|
|
15
|
|
|
|
4
|
|
|
Other, net
|
|
|
(10
|
)
|
|
|
(5
|
)
|
|
Changes in operating assets and liabilities, net of acquired assets
and liabilities:
|
|
|
|
|
|
Receivables
|
|
|
121
|
|
|
|
413
|
|
|
Merchandise inventories
|
|
|
(2,950
|
)
|
|
|
(1,811
|
)
|
|
Other assets
|
|
|
(45
|
)
|
|
|
(36
|
)
|
|
Accounts payable
|
|
|
3,085
|
|
|
|
1,530
|
|
|
Other liabilities
|
|
|
(400
|
)
|
|
|
(187
|
)
|
|
Income taxes
|
|
|
(127
|
)
|
|
|
62
|
|
|
Total cash provided by operating activities
|
|
|
1,107
|
|
|
|
1,203
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Additions to property and equipment
|
|
|
(619
|
)
|
|
|
(489
|
)
|
|
Purchases of investments
|
|
|
—
|
|
|
|
(4,047
|
)
|
|
Sales of investments
|
|
|
1,970
|
|
|
|
3,518
|
|
|
Acquisition of a business, net of cash acquired
|
|
|
(792
|
)
|
|
|
—
|
|
|
Other, net
|
|
|
15
|
|
|
|
2
|
|
|
Total cash provided by (used in) investing activities
|
|
|
574
|
|
|
|
(1,016
|
)
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Repurchase of common stock
|
|
|
(1,144
|
)
|
|
|
(1,138
|
)
|
|
Issuance of common stock
|
|
|
37
|
|
|
|
145
|
|
|
Dividends paid
|
|
|
(376
|
)
|
|
|
(310
|
)
|
|
Borrowings of debt
|
|
|
498
|
|
|
|
—
|
|
|
Repayments of debt
|
|
|
(535
|
)
|
|
|
(31
|
)
|
|
Other, net
|
|
|
(6
|
)
|
|
|
(1
|
)
|
|
Total cash used in financing activities
|
|
|
(1,526
|
)
|
|
|
(1,335
|
)
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(16
|
)
|
|
|
15
|
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
|
139
|
|
|
|
(1,133
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of period
1
|
|
|
1,300
|
|
|
|
2,433
|
|
|
Cash, cash equivalents and restricted cash at end of period
1
|
|
$
|
1,439
|
|
|
$
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Included within the beginning and ending cash, cash equivalents and
restricted cash balances is restricted cash recorded within Other
current assets on the Condensed Consolidated Balance Sheets.
|
|
|
|
BEST BUY CO., INC.
SEGMENT INFORMATION
($ in
millions)
(Unaudited and subject to reclassification)
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Domestic Segment Results
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Revenue
|
|
$
|
8,756
|
|
|
$
|
8,491
|
|
|
$
|
25,807
|
|
|
$
|
24,675
|
|
|
Comparable sales % change
|
|
|
4.3
|
%
|
|
|
4.5
|
%
|
|
|
5.8
|
%
|
|
|
3.8
|
%
|
|
Comparable online sales % change
|
|
|
12.6
|
%
|
|
|
22.3
|
%
|
|
|
11.5
|
%
|
|
|
25.3
|
%
|
|
Gross profit
|
|
$
|
2,139
|
|
|
$
|
2,096
|
|
|
$
|
6,159
|
|
|
$
|
5,952
|
|
|
Gross profit as a % of revenue
|
|
|
24.4
|
%
|
|
|
24.7
|
%
|
|
|
23.9
|
%
|
|
|
24.1
|
%
|
|
SG&A
|
|
$
|
1,824
|
|
|
$
|
1,751
|
|
|
$
|
5,201
|
|
|
$
|
4,993
|
|
|
SG&A as a % of revenue
|
|
|
20.8
|
%
|
|
|
20.6
|
%
|
|
|
20.2
|
%
|
|
|
20.2
|
%
|
|
Operating income
|
|
$
|
315
|
|
|
$
|
345
|
|
|
$
|
911
|
|
|
$
|
959
|
|
|
Operating income as a % of revenue
|
|
|
3.6
|
%
|
|
|
4.1
|
%
|
|
|
3.5
|
%
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
Domestic Segment Non-GAAP Results
1
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
2,139
|
|
|
$
|
2,096
|
|
|
$
|
6,159
|
|
|
$
|
5,952
|
|
|
Gross profit as a % of revenue
|
|
|
24.4
|
%
|
|
|
24.7
|
%
|
|
|
23.9
|
%
|
|
|
24.1
|
%
|
|
SG&A
|
|
$
|
1,806
|
|
|
$
|
1,751
|
|
|
$
|
5,177
|
|
|
$
|
4,993
|
|
|
SG&A as a % of revenue
|
|
|
20.6
|
%
|
|
|
20.6
|
%
|
|
|
20.1
|
%
|
|
|
20.2
|
%
|
|
Operating income
|
|
$
|
333
|
|
|
$
|
345
|
|
|
$
|
982
|
|
|
$
|
959
|
|
|
Operating income as a % of revenue
|
|
|
3.8
|
%
|
|
|
4.1
|
%
|
|
|
3.8
|
%
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
International Segment Results
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Revenue
|
|
$
|
834
|
|
|
$
|
829
|
|
|
$
|
2,271
|
|
|
$
|
2,113
|
|
|
Comparable sales % change
|
|
|
3.7
|
%
|
|
|
3.8
|
%
|
|
|
5.8
|
%
|
|
|
4.2
|
%
|
|
Gross profit
|
|
$
|
185
|
|
|
$
|
184
|
|
|
$
|
519
|
|
|
$
|
503
|
|
|
Gross profit as a % of revenue
|
|
|
22.2
|
%
|
|
|
22.2
|
%
|
|
|
22.9
|
%
|
|
|
23.8
|
%
|
|
SG&A
|
|
$
|
178
|
|
|
$
|
181
|
|
|
$
|
508
|
|
|
$
|
491
|
|
|
SG&A as a % of revenue
|
|
|
21.3
|
%
|
|
|
21.8
|
%
|
|
|
22.4
|
%
|
|
|
23.2
|
%
|
|
Operating income
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
12
|
|
|
Operating income as a % of revenue
|
|
|
0.8
|
%
|
|
|
0.6
|
%
|
|
|
0.5
|
%
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
International Segment Non-GAAP Results
1
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
185
|
|
|
$
|
184
|
|
|
$
|
519
|
|
|
$
|
503
|
|
|
Gross profit as a % of revenue
|
|
|
22.2
|
%
|
|
|
22.2
|
%
|
|
|
22.9
|
%
|
|
|
23.8
|
%
|
|
SG&A
|
|
$
|
178
|
|
|
$
|
181
|
|
|
$
|
507
|
|
|
$
|
491
|
|
|
SG&A as a % of revenue
|
|
|
21.3
|
%
|
|
|
21.8
|
%
|
|
|
22.3
|
%
|
|
|
23.2
|
%
|
|
Operating income
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
Operating income as a % of revenue
|
|
|
0.8
|
%
|
|
|
0.4
|
%
|
|
|
0.5
|
%
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For GAAP to non-GAAP reconciliations, please refer to the attached
supporting schedule titled Reconciliation of Non-GAAP Financial
Measures.
|
|
|
|
BEST BUY CO., INC.
REVENUE CATEGORY SUMMARY
(Unaudited
and subject to reclassification)
|
|
|
|
|
|
|
Revenue Mix Summary
|
|
Comparable Sales
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Domestic Segment
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Consumer Electronics
|
|
31%
|
|
31%
|
|
3.7 %
|
|
3.5 %
|
|
Computing and Mobile Phones
|
|
47%
|
|
48%
|
|
3.1 %
|
|
3.5 %
|
|
Entertainment
|
|
6%
|
|
6%
|
|
12.4 %
|
|
4.1 %
|
|
Appliances
|
|
11%
|
|
10%
|
|
8.4 %
|
|
13.5 %
|
|
Services
|
|
5%
|
|
5%
|
|
1.9 %
|
|
3.2 %
|
|
Other
|
|
—%
|
|
—%
|
|
N/A
|
|
N/A
|
|
Total
|
|
100%
|
|
100%
|
|
4.3 %
|
|
4.5 %
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Mix Summary
|
|
Comparable Sales
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
International Segment
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Consumer Electronics
|
|
26%
|
|
27%
|
|
(0.6)%
|
|
4.5 %
|
|
Computing and Mobile Phones
|
|
51%
|
|
52%
|
|
2.0 %
|
|
0.6 %
|
|
Entertainment
|
|
7%
|
|
6%
|
|
10.8 %
|
|
7.8 %
|
|
Appliances
|
|
8%
|
|
8%
|
|
11.7 %
|
|
49.0 %
|
|
Services
|
|
6%
|
|
5%
|
|
15.0 %
|
|
(15.1)%
|
|
Other
|
|
2%
|
|
2%
|
|
43.8 %
|
|
N/A
|
|
Total
|
|
100%
|
|
100%
|
|
3.7 %
|
|
3.8 %
|
|
|
|
|
|
|
|
|
|
BEST BUY CO., INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
($ in millions, except per share amounts)
(Unaudited
and subject to reclassification)
The following information provides reconciliations of the most
comparable financial measures presented in accordance with accounting
principles generally accepted in the U.S. (GAAP financial measures) to
presented non-GAAP financial measures. The company believes that
non-GAAP financial measures, when reviewed in conjunction with GAAP
financial measures, can provide more information to assist investors in
evaluating current period performance and in assessing future
performance. For these reasons, internal management reporting also
includes non-GAAP measures. Generally, presented non-GAAP measures
include adjustments for items such as restructuring charges, goodwill
impairments, gains and losses on investments, 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 the company believes this provides greater clarity to
management and investors. These non-GAAP financial measures should be
considered in addition to, and not superior to or as a substitute for,
the GAAP financial measures presented in this earnings release and the
company’s financial statements and other publicly filed reports.
Non-GAAP measures as presented herein may not be comparable to similarly
titled measures used by other companies.
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
November 3, 2018
|
|
October 28, 2017
|
|
|
Domestic
|
|
International
|
|
Consolidated
|
|
Domestic
|
|
International
|
|
Consolidated
|
|
SG&A
|
|
$
|
1,824
|
|
|
$
|
178
|
|
|
$
|
2,002
|
|
|
$
|
1,751
|
|
|
$
|
181
|
|
|
$
|
1,932
|
|
|
% of revenue
|
|
|
20.8
|
%
|
|
|
21.3
|
%
|
|
|
20.9
|
%
|
|
|
20.6
|
%
|
|
|
21.8
|
%
|
|
|
20.7
|
%
|
|
Acquisition-related transaction costs1 |
|
|
(13
|
)
|
|
|
—
|
|
|
|
(13
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Intangible asset amortization1 |
|
|
(5
|
)
|
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-GAAP SG&A
|
|
$
|
1,806
|
|
|
$
|
178
|
|
|
$
|
1,984
|
|
|
$
|
1,751
|
|
|
$
|
181
|
|
|
$
|
1,932
|
|
|
% of revenue
|
|
|
20.6
|
%
|
|
|
21.3
|
%
|
|
|
20.7
|
%
|
|
|
20.6
|
%
|
|
|
21.8
|
%
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
315
|
|
|
$
|
7
|
|
|
$
|
322
|
|
|
$
|
345
|
|
|
$
|
5
|
|
|
$
|
350
|
|
|
% of revenue
|
|
|
3.6
|
%
|
|
|
0.8
|
%
|
|
|
3.4
|
%
|
|
|
4.1
|
%
|
|
|
0.6
|
%
|
|
|
3.8
|
%
|
|
Acquisition-related transaction costs1 |
|
|
13
|
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Intangible asset amortization1 |
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Restructuring charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
Non-GAAP operating income
|
|
$
|
333
|
|
|
$
|
7
|
|
|
$
|
340
|
|
|
$
|
345
|
|
|
$
|
3
|
|
|
$
|
348
|
|
|
% of revenue
|
|
|
3.8
|
%
|
|
|
0.8
|
%
|
|
|
3.5
|
%
|
|
|
4.1
|
%
|
|
|
0.4
|
%
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
|
|
|
16.1
|
%
|
|
|
|
|
|
|
30.4
|
%
|
|
Tax reform - repatriation tax2 |
|
|
|
|
|
|
5.4
|
%
|
|
|
|
|
|
|
—
|
%
|
|
Tax reform - deferred tax rate change2 |
|
|
|
|
|
|
1.5
|
%
|
|
|
|
|
|
|
—
|
%
|
|
Acquisition-related transaction costs1 |
|
|
|
|
|
|
(0.6
|
)%
|
|
|
|
|
|
|
—
|
%
|
|
Intangible asset amortization1 |
|
|
|
|
|
|
(0.3
|
)%
|
|
|
|
|
|
|
—
|
%
|
|
(Gain) loss on investments, net
|
|
|
|
|
|
|
0.6
|
%
|
|
|
|
|
|
|
0.1
|
%
|
|
Restructuring charges
|
|
|
|
|
|
|
—
|
%
|
|
|
|
|
|
|
(0.1
|
)%
|
|
Non-GAAP effective tax rate
|
|
|
|
|
|
|
22.7
|
%
|
|
|
|
|
|
|
30.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
November 3, 2018
|
|
October 28, 2017
|
|
|
Pretax
Earnings
|
|
Net of Tax
4
|
|
Per Share
|
|
Pretax
Earnings
|
|
Net of Tax
4
|
|
Per Share
|
|
GAAP diluted EPS
|
|
|
|
|
|
$
|
0.99
|
|
|
|
|
|
|
$
|
0.78
|
|
Tax reform - repatriation tax2 |
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
|
(0.06
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
Tax reform - deferred tax rate change2 |
|
|
—
|
|
|
|
(5
|
)
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Acquisition-related transaction costs1 |
|
|
13
|
|
|
|
10
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Intangible asset amortization1 |
|
|
5
|
|
|
|
4
|
|
|
|
0.02
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(Gain) loss on investments, net
|
|
|
(12
|
)
|
|
|
(9
|
)
|
|
|
(0.03
|
)
|
|
|
1
|
|
|
|
1
|
|
|
|
—
|
|
Restructuring charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
Non-GAAP diluted EPS
|
|
|
|
|
|
$
|
0.93
|
|
|
|
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
|
November 3, 2018
|
|
October 28, 2017
|
|
|
Domestic
|
|
International
|
|
Consolidated
|
|
Domestic
|
|
International
|
|
Consolidated
|
|
SG&A
|
|
$
|
5,201
|
|
|
$
|
508
|
|
|
$
|
5,709
|
|
|
$
|
4,993
|
|
|
$
|
491
|
|
|
$
|
5,484
|
|
|
% of revenue
|
|
|
20.2
|
%
|
|
|
22.4
|
%
|
|
|
20.3
|
%
|
|
|
20.2
|
%
|
|
|
23.2
|
%
|
|
|
20.5
|
%
|
|
Acquisition-related transaction costs1 |
|
|
(13
|
)
|
|
|
—
|
|
|
|
(13
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Intangible asset amortization1 |
|
|
(5
|
)
|
|
|
—
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Tax reform-related item - employee bonus2 |
|
|
(6
|
)
|
|
|
(1
|
)
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-GAAP SG&A
|
|
$
|
5,177
|
|
|
$
|
507
|
|
|
$
|
5,684
|
|
|
$
|
4,993
|
|
|
$
|
491
|
|
|
$
|
5,484
|
|
|
% of revenue
|
|
|
20.1
|
%
|
|
|
22.3
|
%
|
|
|
20.2
|
%
|
|
|
20.2
|
%
|
|
|
23.2
|
%
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
911
|
|
|
$
|
11
|
|
|
$
|
922
|
|
|
$
|
959
|
|
|
$
|
12
|
|
|
$
|
971
|
|
|
% of revenue
|
|
|
3.5
|
%
|
|
|
0.5
|
%
|
|
|
3.3
|
%
|
|
|
3.9
|
%
|
|
|
0.6
|
%
|
|
|
3.6
|
%
|
|
Restructuring charges3 |
|
|
47
|
|
|
|
—
|
|
|
|
47
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Acquisition-related transaction costs1 |
|
|
13
|
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Intangible asset amortization1 |
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Tax reform-related item - employee bonus2 |
|
|
6
|
|
|
|
1
|
|
|
|
7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-GAAP operating income
|
|
$
|
982
|
|
|
$
|
12
|
|
|
$
|
994
|
|
|
$
|
959
|
|
|
$
|
12
|
|
|
$
|
971
|
|
|
% of revenue
|
|
|
3.8
|
%
|
|
|
0.5
|
%
|
|
|
3.5
|
%
|
|
|
3.9
|
%
|
|
|
0.6
|
%
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
|
|
|
20.4
|
%
|
|
|
|
|
|
|
32.7
|
%
|
|
Tax reform - repatriation tax2 |
|
|
|
|
|
|
1.9
|
%
|
|
|
|
|
|
|
—
|
%
|
|
Tax reform - deferred tax rate change2 |
|
|
|
|
|
|
0.5
|
%
|
|
|
|
|
|
|
—
|
%
|
|
Restructuring charges3 |
|
|
|
|
|
|
0.1
|
%
|
|
|
|
|
|
|
—
|
%
|
|
(Gain) loss on investments, net
|
|
|
|
|
|
|
—
|
%
|
|
|
|
|
|
|
0.1
|
%
|
|
Non-GAAP effective tax rate
|
|
|
|
|
|
|
22.9
|
%
|
|
|
|
|
|
|
32.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
|
November 3, 2018
|
|
October 28, 2017
|
|
|
Pretax
Earnings
|
|
Net of Tax
4
|
|
Per Share
|
|
Pretax
Earnings
|
|
Net of Tax
4
|
|
Per Share
|
|
GAAP diluted EPS
|
|
|
|
|
|
$
|
2.57
|
|
|
|
|
|
|
$
|
2.05
|
|
Tax reform - repatriation tax2 |
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
|
(0.06
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
Tax reform - deferred tax rate change2 |
|
|
—
|
|
|
|
(5
|
)
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Restructuring charges3 |
|
|
47
|
|
|
|
36
|
|
|
|
0.13
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Acquisition-related transaction costs1 |
|
|
13
|
|
|
|
10
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Intangible asset amortization1 |
|
|
5
|
|
|
|
4
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Tax reform-related item - employee bonus2 |
|
|
7
|
|
|
|
5
|
|
|
|
0.02
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(Gain) loss on investments, net
|
|
|
(12
|
)
|
|
|
(9
|
)
|
|
|
(0.03
|
)
|
|
|
6
|
|
|
|
4
|
|
|
|
0.01
|
|
Non-GAAP diluted EPS
|
|
|
|
|
|
$
|
2.65
|
|
|
|
|
|
|
$
|
2.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents charges associated with the acquisition of GreatCall,
Inc., including 1) acquisition-related transaction costs primarily
comprised of professional fees, and 2) the non-cash amortization of
definite-lived intangible assets, including customer relationships,
tradenames and technology.
|
|
(2)
|
|
Represents adjustments to the provisional tax expense recorded in Q4
FY18 resulting from the Tax Cuts and Jobs Act of 2017 ("tax reform")
enacted into law in Q4 FY18, including adjustments associated with a
deemed repatriation tax and the revaluation of deferred tax assets
and liabilities, as well as adjustments to tax reform-related items
announced in response to future tax savings created by tax reform,
including a one-time bonus for certain employees.
|
|
(3)
|
|
Represents charges primarily associated with the closure of our Best
Buy Mobile stand-alone stores in the U.S.
|
|
(4)
|
|
The non-GAAP adjustments relate primarily to adjustments in the
United States and Canada. As such, the income tax charge is
calculated using the statutory tax rates for the United States
(24.5% for the periods ended November 3, 2018, and 38.0% for the
periods ended October 28, 2017) and Canada (26.9% for the periods
ended November 3, 2018, and 26.6% for the periods ended October 28,
2017), applied to the non-GAAP adjustments of each country.
|
|
|
|
Return on Assets and Non-GAAP Return on
Invested Capital
The following table includes a reconciliation to the calculation of
return on assets ("ROA") (GAAP financial measure), along with the
calculation of non-GAAP return on invested capital (“ROIC”) for total
operations, which includes both continuing and discontinued operations,
(non-GAAP financial measure) for the periods presented.
The company defines non-GAAP ROIC as non-GAAP net operating profit after
tax divided by average invested capital using the trailing four-quarter
average. The company believes non-GAAP ROIC is a useful financial
measure for investors in evaluating the efficiency and effectiveness of
the use of capital and believes non-GAAP ROIC is an important component
of shareholders' return over the long term. This method of determining
non-GAAP ROIC may differ from other companies' methods and therefore may
not be comparable to those used by other companies.
|
|
|
|
|
|
Calculation of Return on Assets ("ROA")
|
|
November 3,
2018
1
|
|
October 28,
2017
1
|
|
Net earnings
|
|
$
|
1,093
|
|
|
$
|
1,243
|
|
|
Total assets
|
|
|
13,031
|
|
|
|
13,760
|
|
|
ROA
|
|
|
8.4
|
%
|
|
|
9.0
|
%
|
|
|
|
|
|
|
Calculation of Non-GAAP Return on Invested Capital ("ROIC")
|
|
November 3,
2018
1
|
|
October 28,
2017
1
|
|
Net Operating Profit After Taxes ("NOPAT")
|
|
|
|
|
|
Operating income - continuing operations
|
|
$
|
1,794
|
|
|
$
|
1,852
|
|
|
Operating income - discontinued operations
|
|
|
—
|
|
|
|
1
|
|
|
Total operating income
|
|
|
1,794
|
|
|
|
1,853
|
|
|
Add: Operating lease interest2 |
|
|
233
|
|
|
|
235
|
|
|
Add: Non-GAAP operating income adjustments3 |
|
|
182
|
|
|
|
9
|
|
|
Add: Investment income
|
|
|
53
|
|
|
|
46
|
|
|
Less: Income taxes4 |
|
|
(677
|
)
|
|
|
(802
|
)
|
|
Non-GAAP NOPAT
|
|
$
|
1,585
|
|
|
$
|
1,341
|
|
|
|
|
|
|
|
Average Invested Capital
|
|
|
|
|
|
Total assets
|
|
$
|
13,031
|
|
|
$
|
13,760
|
|
|
Less: Excess cash5 |
|
|
(1,916
|
)
|
|
|
(3,185
|
)
|
|
Add: Capitalized operating lease obligations6 |
|
|
3,891
|
|
|
|
3,910
|
|
|
Total liabilities
|
|
|
(9,723
|
)
|
|
|
(9,334
|
)
|
|
Exclude: Debt7 |
|
|
1,218
|
|
|
|
1,349
|
|
|
Average Invested Capital
|
|
$
|
6,501
|
|
|
$
|
6,500
|
|
|
|
|
|
|
|
Non-GAAP ROIC
|
|
|
24.4
|
%
|
|
|
20.6
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Income statement accounts represent the activity for the trailing 12
months ended as of each of the balance sheet dates. Balance sheet
accounts represent the average account balances for the four
quarters ended as of each of the balance sheet dates.
|
|
(2)
|
|
Operating lease interest represents the add-back to operating income
to properly reflect the total interest expense that the company
would incur, if its operating leases were capitalized or owned. The
add-back is calculated by multiplying the trailing 12-month total
rent expense by 30%. This multiple is used for the retail sector by
one of the nationally recognized credit rating agencies that rates
the company's credit worthiness, and the company considers it to be
an appropriate multiple for its lease portfolio.
|
|
(3)
|
|
Includes adjustments for tax reform-related items, restructuring
charges and acquisition-related costs. Additional details regarding
these adjustments are included in the Reconciliation of Non-GAAP
Financial Measures schedule within our quarterly earnings releases.
|
|
(4)
|
|
Income taxes are calculated using a blended statutory rate at the
Enterprise level based on statutory rates from the countries in
which the company does business, which primarily consists of the
U.S. (with a statutory rate ranging from 24.5% to 38.0% for the
periods presented) and Canada (with a statutory rate ranging from
26.6% to 26.9% for the periods presented).
|
|
(5)
|
|
Cash and cash equivalents and short-term investments are capped at
the greater of 1% of revenue or actual amounts on hand. The cash and
cash equivalents and short-term investments in excess of the cap are
subtracted from the company’s calculation of average invested
capital to show their exclusion from total assets.
|
|
(6)
|
|
Capitalized operating lease obligations represent the estimated
assets that the company would record, if the company's operating
leases were capitalized or owned. The obligation is calculated by
multiplying the trailing 12-month total rent expense by the multiple
of five. This multiple is used for the retail sector by one of the
nationally recognized credit rating agencies that rates the
company's credit worthiness, and the company considers it to be an
appropriate multiple for its lease portfolio.
|
|
(7)
|
|
Debt includes short-term debt, current portion of long-term debt and
long-term debt and is added back to the company’s calculation of
average invested capital to show its exclusion from total
liabilities.
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181120005098/en/
Investor Contact:
Mollie O'Brien
(612) 291-7735 or mollie.obrien@bestbuy.com
Media
Contact:
Jeff Shelman
(612) 291-6114 or jeffrey.shelman@bestbuy.com
Source: Best Buy Co., Inc.