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BBY · Best Buy

32 filings

10-K

BBY 10-K Annual Reports

Best Buy - 32 annual reports

Filing record · 2016–202610-K1110-Q328-K109

2026
Best Buy Annual Report, Year Ended Jan 31, 2026
Best Buy Co., Inc. reported fiscal 2026 (ended January 31, 2026) revenue of $41.69 billion, up from $41.53 billion in fiscal 2025, with comparable sales growing 0.5%. Operating income rose to $1.39 billion from $1.26 billion, and diluted EPS increased to $5.04 from $4.28. The increase was driven primarily by lower goodwill and intangible asset impairments ($171 million in fiscal 2026 versus $475 million in fiscal 2025), partially offset by higher restructuring charges of $190 million. Net earnings were $1.07 billion. Adjusted diluted EPS, a non-GAAP measure, was $6.43 versus $6.37 in the prior year. Domestic segment revenue was $38.28 billion, with comparable sales up 0.4%, led by computing and mobile phones (up 5.7%), partially offset by declines in appliances and consumer electronics. International segment revenue was $3.41 billion, with comparable sales up 2.3%. The impairments related to Best Buy Health, which recorded a $118 million goodwill impairment in the third quarter, reflecting lower revenue and margin projections amid pressures in the Medicaid and Medicare Advantage markets. Management also exited a component of that business. Cash flow from operations was $1.96 billion, down from $2.10 billion, mainly because of accounts payable outflows. Capital expenditures were $704 million, and the company repurchased 4.0 million shares for $273 million, with $3.01 billion remaining under its authorization. The quarterly dividend was raised 1% to $0.96 per share. The filing also highlights the February 20, 2026 U.S. Supreme Court ruling that IEEPA tariffs were unauthorized. The ruling did not address refunds, and the outcome of refund proceedings remains uncertain. The company ended the year with 1,068 stores, down from 1,117, and held $1.74 billion in cash against $1.18 billion in long-term debt, including current portion.
Mar 18, 2026
2025
Best Buy Annual Report, Year Ended Feb 1, 2025
Best Buy Co., Inc. (BBY) reported fiscal 2025 revenue of $41.53 billion, down from $43.45 billion in fiscal 2024, which included approximately $735 million from the 53rd week. Comparable sales declined 2.3%, as the company operated in a challenged consumer electronics industry with softer consumer demand. Operating income fell to $1.26 billion from $1.57 billion, driven by a $475 million non-cash goodwill impairment for the Best Buy Health reporting unit. Diluted EPS was $4.28, compared with $5.68 in fiscal 2024. Adjusted diluted EPS, a non-GAAP measure, was $6.37, unchanged from fiscal 2024, as lower adjusted earnings were offset by fewer diluted shares outstanding. Gross profit rate improved to 22.6% of revenue from 22.1%, with services and membership offerings a key driver in the Domestic segment. Domestic comparable sales declined 2.5%, with growth in computing and services offset by declines in appliances, home theater and gaming. Cash provided by operating activities rose to $2.10 billion from $1.47 billion. The company repurchased $500 million of shares and paid $807 million in dividends. The Board approved a 1% increase in the quarterly dividend to $0.95 per share on March 4, 2025. Management's fiscal 2026 priorities are omni-channel enhancements, including AI-driven search and personalization, a mid-fiscal 2026 launch of the Best Buy Marketplace, and expansion of Best Buy Ads. The company expects capital expenditures of $700 million to $750 million in fiscal 2026 and enters the year facing significant uncertainty about the scope and magnitude of tariffs.
Mar 19, 2025
2024
Best Buy Annual Report, Year Ended Feb 3, 2024
Best Buy Co., Inc. (BBY) reported fiscal 2024, a 53-week year ended February 3, 2024, with revenue of $43.45 billion, down from $46.30 billion in fiscal 2023. Comparable sales declined 6.8%, and the filing attributes this to a consumer electronics industry challenged by high inflation, increased spending outside the home, the pull-forward of demand in prior years and lower levels of product innovation. Operating income fell to $1.57 billion from $1.80 billion, and net earnings declined to $1.24 billion from $1.42 billion. Diluted EPS was $5.68, compared with $6.29 in the prior year. Non-GAAP diluted EPS was $6.37, versus $7.08 a year earlier, per the filing's reconciliation. Cash flow from operations was $1.47 billion, down from $1.82 billion, primarily reflecting inventory timing, higher income tax payments and lower earnings. Capital expenditures were $795 million, and the company repurchased 4.7 million shares for $340 million. The quarterly dividend was $0.94 per share after a 2% increase announced February 29, 2024. Cash and cash equivalents were $1.45 billion, and the company held a $1.25 billion undrawn revolving credit facility. The filing reports S&P rating BBB+ (stable) and Moody's A3 (stable). Management launched an enterprise-wide restructuring initiative in the fourth quarter of fiscal 2024, with $153 million of restructuring charges recorded, and plans to close approximately 10 to 15 Best Buy stores in fiscal 2025. The company expects fiscal 2025 capital expenditures of $750 million to $800 million and share repurchases of about $350 million, and it describes fiscal 2025 as a year of expected industry stabilization.
Mar 15, 2024
2023
Best Buy Annual Report, Year Ended Jan 28, 2023
Best Buy Co., Inc. (NYSE: BBY) reported fiscal 2023 revenue of $46.3 billion, down from $51.8 billion in fiscal 2022, with comparable sales declining 9.9%. Operating income fell to $1.80 billion from $3.04 billion, and diluted earnings per share were $6.29 versus $9.84 a year earlier. The filing attributes the decline to lapping pandemic-era demand and stimulus, a shift of consumer spending toward travel and entertainment, and macroeconomic pressure including high inflation. Gross profit rate fell to 21.4% of revenue from 22.5%, driven by lower product margins, increased promotions, and costs tied to the Best Buy Totaltech membership offering. The Domestic segment generated $42.8 billion of revenue (down 10.5%) and accounted for nearly all of the decline, while the International segment (Canada) fell to $3.5 billion. Online revenue was $14.2 billion, down 13.5% on a comparable basis. Management said it expects consumer electronics industry sales to decline again in fiscal 2024. The company launched an enterprise-wide restructuring initiative in the second quarter, recording $147 million of restructuring charges in fiscal 2023. Financially, cash and cash equivalents declined to $1.87 billion, operating cash flow fell to $1.82 billion, and the company repurchased $1.0 billion of stock while paying $789 million in dividends. Management also noted a 5% quarterly dividend increase to $0.92 per share, a $5.0 billion repurchase authorization with $4.13 billion remaining, and a credit rating of BBB+ (S&P) and A3 (Moody's), both with stable outlooks.
Mar 17, 2023
2022
Best Buy Annual Report, Year Ended Jan 29, 2022
Best Buy Co., Inc. (BBY) reported record fiscal 2022 results, with revenue of $51.76 billion, up from $47.26 billion in fiscal 2021, and comparable sales growth of 10.4%. Net earnings rose to $2.45 billion from $1.80 billion, and diluted earnings per share were $9.84, compared with $6.84 a year earlier. Operating income was $3.04 billion, or 5.9% of revenue. The Domestic segment drove most of the growth, with revenue of $47.83 billion and comparable sales up 11.0%. The International segment (Canada, after the exit from Mexico) reported revenue of $3.93 billion and operating income of $244 million, versus $43 million the prior year. Online revenue in the Domestic segment fell 12.0% on a comparable basis to $16.4 billion, as shoppers shifted back to stores. Cash flow and capital return shifted during the year. Operating cash flow fell to $3.25 billion from $4.93 billion, mainly due to inventory purchase timing. Cash and cash equivalents declined to $2.94 billion from $5.49 billion. The company repurchased 32.2 million shares for $3.5 billion and paid $688 million in dividends. It also completed the acquisitions of Current Health Ltd. ($389 million net cash) and Two Peaks, LLC (Yardbird, $79 million). Management announced a new $5.0 billion share repurchase authorization, plans to spend about $1.5 billion on repurchases in fiscal 2023, and a 26% increase in the quarterly dividend to $0.88 per share. Management also flagged risks tied to the Totaltech membership rollout, which pressures near-term services margins, and to macroeconomic conditions, supply chain costs, and the conflict in Ukraine. Balance sheet capacity remains solid. Long-term debt is $1.22 billion, with no borrowings under the $1.25 billion revolving credit facility as of January 29, 2022. Credit ratings are BBB+ (S&P) and A3 (Moody's), both with stable outlooks. Management expects to raise capital expenditures to at least $1 billion annually over the next three fiscal years.
Mar 18, 2022
2021
Best Buy Annual Report, Year Ended Jan 30, 2021
Best Buy Co., Inc. (BBY) reported fiscal 2021 revenue of $47.26 billion, up 8.3% from $43.64 billion in fiscal 2020, with comparable sales growth of 9.7%. Operating income rose to $2.39 billion (5.1% of revenue) from $2.01 billion, and net earnings increased to $1.80 billion, or $6.84 per diluted share, from $5.75. The growth was driven by strong demand for products that help customers work, learn, cook, entertain and connect from home during the COVID-19 pandemic. Domestic online revenue reached $18.67 billion, up 144.4% on a comparable basis, though the gross profit rate fell to 22.4% from 23.0% due to higher supply chain costs from the shift to online sales. The company made the decision in the third quarter of fiscal 2021 to exit its Mexico operations, recording $144 million of International segment charges, and $133 million of Domestic restructuring charges tied to organizational changes. Cash and cash equivalents rose to $5.49 billion from $2.23 billion, and operating cash flow was $4.93 billion versus $2.57 billion. Management resumed share repurchases in the fourth quarter, announced a 27% increase in the quarterly dividend to $0.70 per share, and planned to spend at least $2 billion on repurchases in fiscal 2022. The company also replaced a $650 million 2021 note with a $650 million 2030 note at 1.95%, and Moody's upgraded its rating to A3. Management stated that the pandemic has permanently changed customer shopping behavior toward more digital channels, which the company views as a structural shift. Risks highlighted in the filing include dependence on a few large vendors (five suppliers accounted for about 57% of merchandise purchased), the lower margin profile of online sales, continued COVID-19 uncertainty, and possible future restructuring costs that management cannot yet forecast.
Mar 19, 2021
2020
Best Buy Annual Report, Year Ended Feb 1, 2020
Best Buy Co., Inc. (NYSE: BBY) reported fiscal 2020 revenue of $43.64 billion, up from $42.88 billion in fiscal 2019, with operating income of $2.01 billion (4.6% of revenue) and diluted EPS from continuing operations of $5.75, compared with $5.20 a year earlier. Net earnings were $1.54 billion. Comparable sales grew 2.1%, the sixth consecutive year of positive Enterprise comparable sales. Non-GAAP diluted EPS was $6.07. The Domestic segment generated $40.11 billion of revenue and $1.91 billion of operating income, while the International segment (Canada and Mexico) generated $3.52 billion of revenue and $102 million of operating income. Online revenue rose to $7.64 billion, 19.0% of Domestic segment revenue. The filing's most significant subsequent-period disclosure concerns COVID-19. Stores were shifted to enhanced curbside service only, in-home installation and repair were suspended, and the company drew the full $1.25 billion revolving credit facility on March 19, 2020, and temporarily suspended all share repurchases. The company states that the impact on revenues, profitability and financial position is uncertain. Management also said it expects a significant adverse effect on sales and profits from the pandemic. Cash and cash equivalents were $2.23 billion at fiscal year-end, and operating cash flow was $2.57 billion. The company also raised its regular quarterly dividend 10%, from $0.50 to $0.55 per share, and set fiscal 2025 targets of $50 billion in revenue and a 5.0% non-GAAP operating income rate. Management's Building the New Blue strategy centers on health services, Total Tech Support memberships (almost 2.3 million members) and In-Home Advisors.
Mar 23, 2020
2019
Best Buy Annual Report, Year Ended Feb 2, 2019
Best Buy Co., Inc. (BBY) reported fiscal 2019 (ended February 2, 2019) revenue of $42.88 billion, up 1.7% from $42.15 billion in fiscal 2018, which included an extra week worth approximately $760 million of revenue. Comparable sales grew 4.8%, with the Domestic segment contributing $39.30 billion of revenue and the International segment $3.58 billion. GAAP operating income rose to $1.90 billion from $1.84 billion, and GAAP diluted EPS increased to $5.20 from $3.26, reflecting lower income tax expense after the Tax Cuts and Jobs Act's $283 million charge in fiscal 2018. Non-GAAP diluted EPS from continuing operations was $5.32, compared with $4.42 in fiscal 2018. Gross profit rate declined to 23.2% from 23.4%, driven by higher supply chain costs and lower periodic profit-share revenue, partly offset by lower SG&A as a percentage of revenue (18.7% versus 19.0%). The company acquired GreatCall, Inc., a connected health services provider for aging consumers, on October 1, 2018, for net cash consideration of $787 million, and closed all 257 remaining U.S. Best Buy Mobile stand-alone stores. Cash and cash equivalents fell to $1.98 billion from $3.13 billion in cash, cash equivalents and short-term investments a year earlier, as the company repurchased $1.49 billion of stock and paid $497 million in dividends. Operating cash flow was $2.41 billion. In February 2019 the Board authorized a new $3.0 billion share repurchase program and raised the regular quarterly dividend from $0.45 to $0.50 per share. Management highlighted Best Buy 2020 priorities for fiscal 2020, including growing Total Tech Support membership, expanding the Health business and the In-Home Advisor program, and continuing supply chain transformation. Cumulative annualized cost reductions reached $500 million toward a $600 million goal by the end of fiscal 2021. Key risks include competition from online and multi-channel retailers, dependence on a small number of large vendors (the five largest suppliers represented approximately 51% of merchandise purchased), and exposure to the fourth fiscal quarter holiday season, which generated a large proportion of revenue and earnings.
Mar 28, 2019
2018
Best Buy Annual Report, Year Ended Feb 3, 2018
Best Buy Co., Inc. reported fiscal 2018 (53 weeks ended February 3, 2018) revenue of $42.15 billion, up 7.0% from $39.40 billion in fiscal 2017, with comparable sales growth of 5.6%. Operating income was $1.84 billion, roughly flat versus $1.85 billion in fiscal 2017, as the operating income rate fell to 4.4% of revenue from 4.7%. Net earnings from continuing operations declined to $999 million ($3.26 diluted EPS) from $1.21 billion ($3.74) in fiscal 2017, primarily due to $283 million of provisional tax expense from the Tax Cuts and Jobs Act, along with $80 million of a one-time employee bonus and a $20 million charitable contribution tied to tax reform. Non-GAAP diluted EPS from continuing operations was $4.42, versus $3.51 in fiscal 2017 per the filing's reconciliation. The Domestic segment generated $38.66 billion of revenue (up 6.7%), with online revenue reaching $6.0 billion, up 21.8% on a comparable basis. The company declared its Renew Blue transformation complete and introduced its Best Buy 2020: Building the New Blue strategy. On March 1, 2018, Best Buy announced it would close all 257 remaining U.S. Best Buy Mobile stand-alone stores, with pre-tax restructuring charges expected between $55 million and $65 million, and a 32% increase in the regular quarterly dividend to $0.45 per share. Capital allocation remained shareholder-focused. The company repurchased 35.1 million shares for $2.0 billion during fiscal 2018, had $3.0 billion remaining under its $5.0 billion February 2017 authorization, and announced intent to repurchase $1.5 billion in fiscal 2019. Cash and short-term investments totaled $3.13 billion at year-end, down from $3.92 billion, and the company's current ratio was 1.3. The filing also notes that the fourth quarter, which includes the majority of the holiday season, generated approximately one-third of revenue and more than one-half of net earnings historically.
Apr 2, 2018
2017
Best Buy Annual Report, Year Ended Jan 28, 2017
Best Buy Co., Inc. (BBY) reported fiscal 2017 (52 weeks ended January 28, 2017) revenue of $39.4 billion, down 0.3% from $39.5 billion in fiscal 2016, with comparable sales up 0.3%. Operating income rose to $1.85 billion, or 4.7% of revenue, from $1.38 billion (3.5%) a year earlier, driven by a higher gross profit rate (24.0% vs. 23.3%), lower restructuring charges ($39 million vs. $198 million), and $161 million of CRT/LCD litigation settlements. Net earnings attributable to shareholders were $1.23 billion, or $3.81 per diluted share, versus $897 million ($2.56) in fiscal 2016. The company generated $2.5 billion in operating cash flow and ended the year with $3.9 billion in cash, cash equivalents and short-term investments. The Domestic segment drove results, with revenue of $36.2 billion, operating income of $1.76 billion (4.9% of revenue), and online revenue of $4.8 billion growing 20.8% on a comparable basis. The International segment (Canada and Mexico) returned to operating income of $90 million after a $210 million loss in fiscal 2016, reflecting the completion of the Canadian brand consolidation. Management reports that Renew Blue cost savings reached $350 million of a $400 million target. Capital allocation was shareholder-focused: the company repurchased 21.1 million shares for $751 million, paid $505 million in dividends, and on March 1, 2017 announced a 21% increase in its regular quarterly dividend to $0.34 per share and a $5.0 billion share repurchase authorization, with intent to repurchase $3 billion over two years. Standard & Poor's upgraded the company's long-term rating to BBB- in fiscal 2017, and the company launched its Best Buy 2020: Building the New Blue strategy.
Mar 24, 2017
2016
Best Buy Annual Report, Year Ended Jan 30, 2016
Best Buy Co., Inc. (BBY) reported fiscal 2016 (ended January 30, 2016) revenue of $39.53 billion, down from $40.34 billion in fiscal 2015, with net earnings from continuing operations of $807 million ($2.30 diluted EPS) compared to $1.246 billion ($3.53) a year earlier. The decline was driven by the International segment, where revenue fell 26.2% to $3.16 billion after the Canadian brand consolidation, which included closing 66 Future Shop stores and converting 65 others to Best Buy. Operating income was $1.375 billion, or 3.5% of revenue, reflecting $201 million of restructuring charges. Domestic segment revenue rose 0.9% to $36.37 billion, with operating income of $1.585 billion and a 4.4% operating margin, helped by a periodic profit-sharing benefit on extended service plans and $75 million in net CRT/LCD litigation settlement proceeds in the Domestic segment. Cash generation was $1.322 billion from operations, and year-end cash and short-term investments were $3.281 billion. The company returned $1.5 billion to shareholders in fiscal 2016, including $1.0 billion in share repurchases and $499 million in dividends. For fiscal 2017, management guided to flat Domestic segment revenue and approximately flat operating income, expects cash capital expenditures of $650 million to $700 million, and announced a 22% increase in the regular quarterly dividend to $0.28 per share, a $0.45 special dividend (about $145 million), and an intent to repurchase $1.0 billion of shares over two years. The company's credit ratings were upgraded during fiscal 2016 to BB+ (S&P), Baa1 (Moody's) and BBB- (Fitch), all with Stable outlooks. The Renew Blue Phase 2 cost program delivered $150 million of annualized savings toward a $400 million goal, with $250 million remaining.
Mar 23, 2016
2015
Best Buy Annual Report, Year Ended Jan 31, 2015
Best Buy Co., Inc. reported fiscal 2015 (12 months ended January 31, 2015) revenue of $40.34 billion, down from $40.61 billion in fiscal 2014, with comparable sales up 0.5%. Net earnings from continuing operations rose to $1.246 billion ($3.53 per diluted share) from $695 million ($2.00 per share), but this was helped by a $353 million discrete tax benefit from reorganizing certain European legal entities. Operating income increased to $1.450 billion from $1.144 billion, and operating income as a percent of revenue rose to 3.6% from 2.8%. Fiscal 2014 included $149 million of restructuring charges and LCD-related legal settlements. Management reports non-GAAP diluted EPS of $2.60, up from $2.07. The balance sheet strengthened over the year. Cash, cash equivalents and short-term investments totaled $3.9 billion, versus $2.9 billion a year earlier, and operating cash flow was $1.9 billion. Total debt, including current portion, was $1.621 billion. The company sold its Five Star China business (completed February 13, 2015) and has exited Best Buy Europe. In March 2015 it announced a plan to return capital: a special one-time dividend of $0.51 per share (about $180 million), a 21% increase in the regular quarterly dividend to $0.23, and resumed share repurchases with an intent to buy back $1 billion of stock over three years. Looking ahead, management said fiscal 2016 will carry investment costs of $100 million to $120 million and capital expenditures of $650 million to $700 million. It also announced a Canadian consolidation under the Best Buy brand that includes closing 66 Future Shop stores, with expected restructuring charges and impairments of $200 million to $280 million, most recorded in the first quarter of fiscal 2016. Management expects first- and second-quarter fiscal 2016 comparable sales to be flat to negative low-single digits, and non-GAAP operating income rate to decline by roughly 0.3% to 0.5% of revenue.
Mar 31, 2015
2014
Best Buy Annual Report, Year Ended Feb 1, 2014
Best Buy Co., Inc. reported fiscal 2014 (12 months ended February 1, 2014) revenue of $42.41 billion, up from $39.83 billion in the 11-month fiscal 2013 transition period. The filing attributes the increase mainly to an extra month of revenue, partly offset by store closures, a comparable store sales decline of 0.8%, and foreign currency effects. Operating income was $1.14 billion (2.7% of revenue) versus an operating loss of $119 million in fiscal 2013, which included an $819 million goodwill impairment in International. Net earnings from continuing operations were $689 million, or $1.98 per diluted share, compared with a loss from continuing operations of $467 million. Net earnings attributable to Best Buy shareholders were $532 million, or $1.53 per diluted share, after a $166 million loss from discontinued operations, which mainly reflects the sale of its 50% interest in Best Buy Europe and mindSHIFT. Management is pursuing its Renew Blue transformation, which has five pillars and an eight-priority 24-month road map. Fiscal 2014 restructuring charges were $159 million from continuing operations, and the company says it exceeded its original Renew Blue cost reduction target and raised the target to $1 billion. Cash flow from operations was $1.09 billion, and year-end cash and cash equivalents were $2.68 billion. The company held $4.0 billion of its $5.0 billion share repurchase authorization available and repurchased no shares in fiscal 2014. Management expects fiscal 2015 revenue from its credit card agreement to fall by $150 million to $200 million, and it projects a lower annual effective tax rate after a planned European legal entity reorganization. The company's credit ratings at filing were Baa2 (Moody's, negative outlook), BB (S&P, stable), and BB- (Fitch, stable). Its balance sheet carried $1.66 billion of total debt, and its adjusted debt to EBITDAR ratio was 3.3, up from 2.9. Investors should weigh the improved earnings against declining comparable store sales in the Domestic and International segments, continued price investment, and the reduced revenue expected from the new credit card arrangement.
Mar 28, 2014
2013
Best Buy Annual Report, Year Ended Feb 2, 2013
Best Buy Co., Inc. filed this Transition Report on Form 10-K covering an 11-month fiscal 2013 period ended February 2, 2013, after changing its fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January. Revenue was $45.09 billion for the 11 months, down from $46.06 billion in the comparable recast period, with a comparable store sales decline of 2.9%. The company reported an operating loss of $125 million and a net loss attributable to Best Buy shareholders of $441 million, driven largely by $822 million of goodwill impairments (primarily Best Buy Canada and Five Star) and $451 million of restructuring charges under its Renew Blue program and related U.S. and Europe restructuring actions. Operating cash flow was $1.45 billion, and year-end cash and cash equivalents rose to $1.83 billion from $1.20 billion, helped by the suspension of the share repurchase program and the absence of the $1.3 billion Mobile buy-out payment made in fiscal 2012. Total debt including current portion was $2.30 billion, and the company had no borrowings outstanding under its $2.5 billion revolving credit agreements. Credit ratings were lowered during the period: Standard & Poor's cut its rating to BB, Fitch to BB-, and Moody's kept Baa2 with a Developing outlook. Management described fiscal 2014 as a transition year and laid out six priorities, including accelerating online growth, reducing SG&A costs and optimizing the U.S. real estate portfolio. Investors should weigh the sharp swing to losses, the deteriorating comparable store sales in Domestic and International segments, and the lowered credit ratings against management's Renew Blue plan, which targets $400 million of cost reductions in the U.S., Canada and Mexico, with Phase One expected to yield about $150 million of annualized savings.
Mar 27, 2013
2012
Best Buy Annual Report, Year Ended Mar 3, 2012
Best Buy Co., Inc. reported fiscal 2012 (53 weeks ended March 3, 2012) revenue of $50.7 billion, up 1.9%, but a net loss attributable to Best Buy Co., Inc. of $1.23 billion, or $(3.36) per diluted share, compared with net earnings of $1.28 billion in fiscal 2011. The loss was driven primarily by the $1.3 billion Mobile buy-out of the Best Buy Mobile profit share agreement with Carphone Warehouse Group plc and a $1.2 billion goodwill impairment at the Best Buy Europe reporting unit. Operating income fell to $1.085 billion (2.1% of revenue) from $2.374 billion, and comparable store sales declined 1.7%. Operating cash flow rose to $3.3 billion from $1.2 billion, mainly due to working capital changes. The company is in transition. Management announced a multi-year plan to reduce costs by $800 million by fiscal 2015, including closing approximately 50 large-format U.S. Best Buy stores in fiscal 2013, and expects $300 to $350 million of pre-tax restructuring charges tied to those actions. It is expanding small-format Best Buy Mobile stand-alone stores and Five Star stores in China, and it closed large-format stores in China, Turkey and the U.K. Chief Executive Officer Brian J. Dunn resigned effective April 10, 2012, and George L. Mikan III was named interim CEO while the Audit Committee investigates allegations related to Mr. Dunn's personal conduct. Balance sheet and capital allocation changed significantly. Total assets were $16.0 billion, total equity fell to $4.4 billion from $7.3 billion, and debt including current portion rose to $2.2 billion from $1.7 billion. The company repurchased $1.5 billion of stock in fiscal 2012 and had $4.1 billion remaining under its June 2011 authorization. Fitch lowered its rating to BBB-, and Fitch's outlook was revised to negative in April 2012. Securities class actions relating to fiscal 2011 earnings guidance remain pending.
May 1, 2012
2011
Best Buy Annual Report, Year Ended Feb 26, 2011
Best Buy Co., Inc. reported fiscal 2011 (year ended February 26, 2011) revenue of $50.27 billion, up 1.2% from $49.69 billion in fiscal 2010, driven mainly by the net addition of 147 new stores and favorable foreign currency effects, partially offset by a 1.8% comparable store sales decline. Operating income fell to $2.11 billion from $2.24 billion, with operating margin declining to 4.2% of revenue from 4.5%, primarily due to $222 million of restructuring charges recorded in the fourth quarter tied to exiting the Turkey market, restructuring Best Buy branded stores in China, and efficiency actions in the Domestic segment. Net earnings attributable to Best Buy Co., Inc. were $1.28 billion, down from $1.32 billion, and diluted EPS was $3.08 versus $3.10 in fiscal 2010. The Domestic segment remained the larger contributor, with revenue of $37.19 billion and operating income of $2.03 billion, while the International segment generated $13.09 billion of revenue but only $83 million of operating income, including $171 million of restructuring charges. Comparable store sales in the Domestic segment declined 3.0%, with weakness in entertainment and consumer electronics offset partly by gains in home office, driven by Best Buy Mobile. Cash flow from operations fell to $1.19 billion from $2.21 billion, while capital expenditures rose to $744 million. The company repurchased 32.6 million shares for $1.2 billion and paid $237 million in dividends. Liquidity remained solid, with cash and cash equivalents of $1.10 billion at year-end and a $2.3 billion undrawn revolving credit facility. Subsequent to year-end, in March 2011, the company issued $1.0 billion of notes (3.75% due 2016 and 5.50% due 2021). The filing also discloses pending securities class action lawsuits related to fiscal 2011 earnings guidance, which management believes are without merit and cannot yet quantify.
Apr 25, 2011
2010
Best Buy Annual Report, Year Ended Feb 27, 2010
Best Buy Co., Inc. reported fiscal 2010 (ended February 27, 2010) revenue of $49.69 billion, up 10.4% from $45.02 billion in fiscal 2009, driven primarily by the acquisition of Best Buy Europe, net addition of 85 Domestic stores, and a comparable store sales gain of 0.6%. Net earnings attributable to Best Buy rose 31.3% to $1.32 billion, or $3.10 per diluted share, versus $1.00 billion, or $2.39 per diluted share, in fiscal 2009. Operating income was $2.24 billion (4.5% of revenue) compared with $1.87 billion (4.2%) a year earlier, and the prior year included $78 million of restructuring charges and $66 million of goodwill and tradename impairment charges. Cash and cash equivalents rose to $1.83 billion from $498 million, and operating cash flow increased 17.5% to $2.2 billion while capital expenditures fell 52.8% to $615 million. Short-term debt declined to $663 million from $783 million, and the debt-to-capitalization ratio fell to 22% from 30%. The company made no share repurchases in fiscal 2010 or 2009, with $2.5 billion remaining under its June 2007 authorization, and paid $0.56 per share in dividends. The filing notes continued exposure to consumer discretionary spending, supplier concentration (the five largest suppliers represented 35% of merchandise purchased), and the International segment, which generated 25% of revenue. The company opened 191 new stores during fiscal 2010 and plans 50-55 net large-format Best Buy stores and 75-100 small-format stores in fiscal 2011. Pending legal matters include a class action (Holloway v. Best Buy) alleging employment discrimination, which the company believes is without merit.
Apr 28, 2010
2009
Best Buy Annual Report, Year Ended Feb 28, 2009
Best Buy Co., Inc. reported fiscal 2009 (ended February 28, 2009) revenue of $45.0 billion, up 13% from $40.0 billion in fiscal 2008, driven mainly by the acquisition of Best Buy Europe, which contributed $3.2 billion of revenue, and a net addition of 214 new stores. Comparable store sales declined 1.3%. Net earnings fell 29% to $1.0 billion, or $2.39 per diluted share, from $1.4 billion, or $3.12 per diluted share. The decline reflected the comparable store sales drop, deterioration in the SG&A rate (20.0% of revenue, up from 18.5%), and $144 million of restructuring and goodwill/tradename impairment charges in the fourth quarter, partially offset by an improved gross profit rate (24.4% of revenue, up from 23.9%). The balance sheet and liquidity position weakened. Debt including the current portion rose to $1.96 billion from $816 million, and the debt-to-capitalization ratio increased to 30% from 15%. Cash and cash equivalents and short-term investments fell to $509 million from $1.5 billion, and working capital was a deficiency of $243 million. The company funded the Best Buy Europe, Napster and remaining Five Star acquisitions largely from cash and borrowings, sold $500 million of 6.75% notes due 2013, and made no share repurchases in fiscal 2009. Standard & Poor's downgraded its rating to BBB- with a stable outlook, while Fitch assigned a negative outlook to its BBB+ rating. Lehman CPI's $180 million commitment under the $2.5 billion credit agreement has gone unfunded. Management guided to approximately 65 net new stores in fiscal 2010, fewer new-store openings internationally, and further restructuring charges, including about $27 million at Best Buy Europe in the first quarter of fiscal 2010. Chief Executive Officer Bradbury H. Anderson is scheduled to retire on June 24, 2009, and Brian J. Dunn is to succeed him.
Apr 29, 2009
2008
Best Buy Annual Report, Year Ended Mar 1, 2008
Best Buy Co., Inc. (BBY) reported fiscal 2008 (ended March 1, 2008) revenue of $40.0 billion, up 11% from $35.9 billion, with net earnings of $1.41 billion, or $3.12 per diluted share, compared with $2.79 in fiscal 2007. Growth was driven by the net addition of 137 new stores, a 2.9% comparable store sales gain and acquisitions, partly offset by a lower gross profit rate, which fell to 23.9% of revenue from 24.4%. The SG&A rate improved to 18.5% of revenue from 18.8%, and operating income rose to $2.16 billion from $2.0 billion. The Domestic segment generated $33.3 billion of revenue and $2.0 billion of operating income, while the International segment's revenue reached $6.7 billion with operating income of $162 million. Cash and short-term investments fell to $1.5 billion from $3.8 billion as the company repurchased $3.5 billion of its common stock, including a $3.0 billion accelerated share repurchase (ASR) program. Financed partly by borrowings, total debt including the current portion rose to $816 million from $650 million, and the debt-to-capitalization ratio increased to 15% from 9%. Shareholders' equity declined to $4.48 billion from $6.20 billion. Management's outlook for fiscal 2009 projects diluted EPS of $3.25 to $3.40, revenue of $43 to $44 billion, and capital expenditures of about $1.1 billion, and it plans for a soft consumer environment in the near term. The company also disclosed risks tied to auction-rate securities: $417 million (par value) of these investments were reclassified to non-current assets as auctions began failing in February 2008. Management stated that it expects to recover the full principal and that the illiquidity will not materially affect its business plans. The filing also notes a pending class action, Holloway v. Best Buy Co., Inc., alleging employment discrimination, which the company is defending.
Apr 30, 2008
2007
Best Buy Annual Report, Year Ended Mar 3, 2007
Best Buy Co., Inc. (Richfield, Minnesota) reported fiscal 2007 results for the 53-week year ended March 3, 2007. Revenue rose 16% to $35.9 billion, and net earnings increased 21% to $1.4 billion, or $2.79 per diluted share, compared with $1.1 billion, or $2.27 per diluted share, in fiscal 2006. The comparable store sales gain was 5.0%. Gross profit rate declined to 24.4% of revenue from 25.0%, while the SG&A rate fell to 18.8% from 19.7%, and operating income reached $2.0 billion, or 5.6% of revenue. The Domestic segment generated $31.0 billion in revenue and $1.9 billion in operating income (6.1% of revenue). The International segment, which includes Canada and the newly entered China market through the 75% acquisition of Jiangsu Five Star Appliance Co., generated $4.9 billion in revenue and $110 million in operating income (2.2% of revenue). Fiscal 2007 also included the acquisition of Pacific Sales Kitchen and Bath Centers for $411 million. Cash and short-term investments were $3.8 billion at year-end, and shareholders' equity rose to $6.2 billion. The company repurchased $599 million of stock and paid $174 million in dividends, and the quarterly dividend was raised 25% to $0.10 per share. For fiscal 2008, Best Buy projects net earnings of $3.10 to $3.25 per diluted share, an average increase of 14%, on revenue of about $39.0 billion, roughly 9% growth, driven by approximately 130 new stores. The company also disclosed a May 1, 2007 subsequent acquisition of Speakeasy, Inc. for $97 million in cash.
May 2, 2007
2006
Best Buy Annual Report, Year Ended Feb 25, 2006
Best Buy Co., Inc. (Richfield, Minnesota) reported fiscal 2006 (year ended February 25, 2006) revenue of $30.85 billion, up 12% from $27.43 billion in fiscal 2005, driven by the net addition of 103 stores, a 4.9% comparable store sales gain, and favorable foreign currency effects. Earnings from continuing operations rose 22% to $1.14 billion, or $2.27 per diluted share, versus $934 million, or $1.86 per diluted share. The gross profit rate rose 1.3 points to 25.0% of revenue, while the SG&A rate rose 1.3 points to 19.7%, reflecting higher performance-based incentive pay, customer-centric store labor costs, and services infrastructure. Net earnings also absorbed $132 million of stock-based compensation expense under the early adoption of SFAS 123(R), and benefited from $43 million of gift card breakage income. The company ended the year with $3.7 billion in cash and short-term investments, and returned $923 million to shareholders through buybacks ($772 million) and dividends ($151 million). Management's primary strategy is customer centricity: 300 U.S. Best Buy stores (40% of the total) now run the segmented model, with plans to convert the rest in fiscal 2007. For fiscal 2007, management guides to revenue of $34.0 billion to $35.0 billion, a 10% to 13% increase, and diluted EPS of $2.65 to $2.80, with nearly 90 new stores and a 53-week year. The company also agreed to acquire Pacific Sales Kitchen and Bath Centers, Inc. effective March 7, 2006, for $411 million. Risks flagged in the filing include a pending class action alleging discrimination in employment practices, reliance on a few major suppliers (five suppliers represent roughly one-third of merchandise purchased), and concentration of earnings in the fourth quarter, which generates more than one-half of net earnings. The $400 million convertible subordinated debentures due 2022 became convertible at holders' option after the stock price exceeded the trigger for more than 20 days, with a conversion price of $46.00 per share.
May 10, 2006
2005
Best Buy Annual Report, Year Ended Feb 26, 2005
Best Buy Co., Inc. reported fiscal 2005 (ended February 26, 2005) earnings from continuing operations of $934 million, or $2.79 per diluted share, up 17% from $800 million, or $2.41 per diluted share, in fiscal 2004. Revenue rose 12% to $27.4 billion, driven by 78 new stores, a 4.3% comparable store sales gain, and favorable foreign currency effects. Net earnings were $984 million, or $2.94 per diluted share, including a $50 million tax benefit from the resolution of Musicland-related IRS matters. The operating income rate was 5.3% of revenue, flat with fiscal 2004, as a lower gross profit rate (23.7% versus 23.9%) from a more promotional environment was offset by a lower SG&A rate (18.4% versus 18.6%). Management reiterated its goal of a 7% annual operating income rate, now expected for fiscal 2008 rather than fiscal 2007, citing the expected impact of SFAS 123(R) and additional short-term investments. Its four strategic initiatives are customer centricity, efficient enterprise (including a seven-year agreement with Accenture to manage IT operations), win with service (Geek Squad), and win in entertainment. For fiscal 2006, the company projects revenue of approximately $30.0 billion and diluted earnings per share of $2.95 to $3.10. It ended the year with $3.3 billion in cash and short-term investments, $600 million in total debt, and a $1.5 billion share repurchase program authorized in April 2005. The filing also notes that a securities class action was dismissed with prejudice on April 12, 2005, subject to appeal rights, and that Ernst & Young was dismissed in favor of Deloitte & Touche for fiscal 2006.
May 10, 2005
2004
Best Buy Annual Report, Year Ended Feb 28, 2004
Best Buy Co., Inc. (BBY) reported fiscal 2004 (year ended February 28, 2004) revenue from continuing operations of $24.5 billion, up 17% from $20.9 billion in fiscal 2003, with earnings from continuing operations of $800 million, or $2.44 per diluted share, up 29% from $622 million, or $1.91 per diluted share. The increase was driven by a 7.1% comparable store sales gain, an improved gross profit rate of 25.2% of revenue, and an SG&A rate that declined to 19.9% of revenue. Operating income rose to $1.30 billion, or 5.3% of revenue. Net earnings were $705 million after a $95 million loss from discontinued operations, which included a $66 million after-tax loss on the June 2003 sale of the Musicland business to an affiliate of Sun Capital Partners. The company operated 608 U.S. Best Buy stores, 22 Magnolia Audio Video stores, 108 Future Shop stores and 19 Canadian Best Buy stores at year end, and opened 78 new stores during the year. It also initiated its first-ever cash dividends, paying a $0.30 special dividend and a $0.10 regular quarterly dividend, and repurchased $100 million of stock. Management projects fiscal 2005 earnings from continuing operations of $2.80 to $2.93 per diluted share and revenue of approximately $27.5 billion. The filing also discloses four federal securities class action lawsuits and a shareholder derivative action, which management believes are without merit. Cash rose to $2.6 billion, and the debt-to-capitalization ratio improved to 20% from 23%.
Apr 29, 2004
2003
Best Buy Annual Report, Year Ended Mar 1, 2003
Best Buy Co., Inc. (NYSE: BBY) reported fiscal 2003 (ended March 1, 2003) revenue from continuing operations of $20.9 billion, up 13% from fiscal 2002. Earnings from continuing operations rose 10% to $622 million, or $1.91 per diluted share. Operating income from continuing operations was $1.01 billion, a 4.8% operating income rate. Comparable store sales increased 2.4%, and the company opened 90 new stores during the year, including 67 U.S. Best Buy stores. Net earnings fell sharply to $99 million, or $0.30 per diluted share, because of a $441 million loss from discontinued operations and $82 million of cumulative-effect accounting charges. The discontinued operations relate to Musicland, which the company committed in the fourth quarter to sell after it did not meet financial objectives. The loss includes non-cash charges of $418 million after tax, including a $308 million goodwill write-off and a $102 million after-tax asset impairment. The company has not yet determined the final financial impact of the planned sale. The company ended the year with $1.9 billion in cash, working capital of $1.1 billion, and a long-term debt-to-capitalization ratio of 23%. Management projects fiscal 2004 revenue from continuing operations of approximately $23.5 billion and diluted EPS from continuing operations of $2.17 to $2.22, with capital expenditures of about $700 million.
May 30, 2003
2002
Best Buy Annual Report, Year Ended Mar 2, 2002
Best Buy Co., Inc. filed its annual report on Form 10-K for the fiscal year ended March 2, 2002, describing itself as North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances, with revenues of $19.6 billion for the year. Net earnings rose 44% to a record $570 million, compared with $396 million in fiscal 2001, and diluted earnings per share increased to $1.77 from $1.24. Revenues grew 28%, driven by new Best Buy stores (62 opened in fiscal 2002), a full year of acquired businesses and the inclusion of Musicland and Future Shop. The Best Buy segment's comparable store sales rose 1.9%, while Musicland's comparable store sales declined 0.9%, and Future Shop's comparable store sales rose 17.4% before currency effects. The company now operates three segments (Best Buy, Musicland and International) and ended the year with 1,910 stores. Cash and cash equivalents increased to $1.86 billion, and the company raised $726 million net from convertible debentures. Long-term debt-to-capitalization rose to 24% from 9%. Management projects fiscal 2003 diluted earnings of approximately $2.10 to $2.17 per share and revenues of $23.0 billion to $23.5 billion, and it expects capital expenditures of about $1 billion. Several of the filing's key discussions are incorporated by reference from the Annual Report (Exhibit 13.1).
May 30, 2002
2001
Best Buy Annual Report, Year Ended Mar 3, 2001
Best Buy Co., Inc. reported record earnings for the fourth consecutive year for the fiscal year ended March 3, 2001 (a 53-week year). Net earnings were $395.8 million, or $1.86 per diluted share, up from $347.1 million ($1.63) in fiscal 2000 and $216.3 million ($1.03) in fiscal 1999. Revenues rose 23% to $15.3 billion, driven by 62 new Best Buy stores, a 4.9% comparable store sales increase, and roughly $160 million in revenue from Musicland and Magnolia Hi-Fi after their acquisition dates. Gross profit margin improved to 20.0% from 19.2%, while SG&A rose to 16.0% of revenues from 14.8%, reflecting investments in BestBuy.com, the New York market, and Musicland integration. Operating income was $604.3 million, or 3.9% of revenues. The fourth quarter of fiscal 2001 included the acquisitions of Musicland Stores Corporation, a mall-based retailer of pre-recorded music and movies with about 1,300 stores, and Magnolia Hi-Fi, a high-end audio and video retailer with 13 stores. Total cash paid for the acquisitions was $513 million ($326 million net of cash acquired), and Best Buy assumed $260 million of Musicland debt. Microsoft Corporation invested $200 million in Best Buy common stock as part of a strategic alliance. Shareholders' equity rose to $1.82 billion and year-end cash was $747 million, with total debt of $295.9 million. For fiscal 2002, management expects net earnings growth, sales of $19.0 billion to $19.5 billion, and capital expenditures of $700 million to $750 million, with about 60 new Best Buy stores planned. Management expects the Musicland integration to weigh on the first three quarters of fiscal 2002, and it anticipates lower net interest income and a higher effective tax rate because Musicland goodwill is not deductible. The company has never paid cash dividends and has no current plans to do so.
Jun 1, 2001
2000
Best Buy Annual Report, Year Ended Feb 26, 2000
Best Buy Co., Inc. reported record fiscal 2000 results for the year ended February 26, 2000. Revenues rose 24.1% to $12.49 billion from $10.06 billion, driven by an 11.1% comparable store sales increase, and net earnings increased 60% to $347.1 million, or $1.63 per diluted share, compared with $216.3 million ($1.03 per share) in fiscal 1999. Gross profit margin improved to 19.2% of revenues from 18.0%, and operating income rose to 4.3% of revenues from 3.5%. The company operated 357 stores in 39 states at year-end and opened 47 new stores during the year. Management is investing in growth and strategic initiatives. The company plans to open about 60 stores in fiscal 2001 and expects capital expenditures of approximately $600 million that year. It formed BestBuy.com, Inc., a wholly-owned subsidiary, to launch an expanded e-commerce business in June 2000, and it finalized a strategic alliance with Microsoft after year-end, under which Microsoft purchased 3.9 million Best Buy shares for $200 million. The company repurchased nearly $400 million of its common stock during fiscal 2000 and ended the year with cash and cash equivalents of $750.7 million and shareholders' equity of $1.10 billion. Cash flow from operations increased $98 million to $760 million. Debt was reduced by $30 million, and the company said it expects its funds from operations and available cash to be sufficient for its anticipated expansion plans for the next year. The company does not pay cash dividends and has no current plans to do so.
May 24, 2000
1999-A
Best Buy Annual Report (Amendment), Year Ended Feb 27, 1999
Best Buy Co., Inc. reported record fiscal 1999 results (year ended February 27, 1999) in this amended annual report, which restates prior periods to reflect a change in accounting for Performance Service Plans (PSPs), a type of extended service contract. Revenues rose 21% to $10.06 billion from $8.34 billion, driven by a 13.5% comparable store sales increase and 28 new stores. Net earnings were $216.3 million, or $1.03 per diluted share, compared with $81.9 million, or $.46, in fiscal 1998. Operating income more than doubled to $351 million, and operating margin widened to 3.5% of sales from 2.0%, as gross profit margin improved to 18.0% from 15.7%. The filing attributes the gain to better inventory management, which lifted inventory turns to 6.6 from 5.6, and to a more profitable product mix. The balance sheet strengthened considerably. The company reduced long-term debt by more than $380 million, prepaid its $150 million 8-5/8% Senior Subordinated Notes, and converted its $230 million in convertible preferred securities into common equity. Cash and cash equivalents increased by $266 million to $785.8 million, and shareholders' equity exceeded $1 billion at year end. Capital spending was $166 million in fiscal 1999 and is expected to exceed $300 million in fiscal 2000, when the company plans to open about 45 stores and remodel roughly 20 others. Management expects gross profit margin to keep improving, though at a slower pace, and expects SG&A to rise as it invests in information systems and e-commerce. The restatement reduced fiscal 1999 diluted EPS from $1.07 as previously reported to $1.03, and reduced retained earnings by approximately $30 million as of February 27, 1999. Best Buy does not pay cash dividends, and its common stock trades on the New York Stock Exchange under the symbol BBY.
Feb 14, 2000
1999
Best Buy Annual Report, Year Ended Feb 27, 1999
Best Buy Co., Inc. (the Company) reported fiscal 1999 results for the year ended February 27, 1999, describing it as the nation's largest volume specialty retailer of name brand consumer electronics, home office equipment, entertainment software and appliances. Revenues rose 21% to $10.08 billion from $8.36 billion, driven by a 13.5% comparable store sales increase, 28 new stores and a full year of operations at stores opened in fiscal 1998. Net earnings were $224.4 million, or $1.07 per diluted share, compared with $94.5 million, or $.52, in fiscal 1998. Operating income nearly doubled to $364.5 million, and the operating margin rose to 3.6% of sales from 2.2%, as the gross profit margin improved to 18.1% from 15.9%. The balance sheet and liquidity also strengthened. Long-term debt including the current portion fell to $60.6 million from $225.3 million, after the conversion of $230 million in convertible preferred securities into common stock and the prepayment of the $150 million 8-5/8% Senior Subordinated Notes. Cash and cash equivalents rose to $785.8 million, and shareholders' equity reached $1.06 billion. Inventory turns improved to 6.6x from 5.6x. Management expects SG&A to increase in fiscal 2000 to fund information systems, technical services and E-commerce, and plans to open approximately 45 stores and spend more than $300 million in capital expenditures that year. The Company also disclosed that it has not historically paid cash dividends and does not intend to do so. Year 2000 remediation of mainframe systems was over 95% complete, with combined outside professional costs of approximately $9 million for that portion and about $8 million expected for the non-mainframe portion. The filing states that the Company's operations are not currently subject to material market risks for interest rates, foreign currency, or commodity prices.
May 27, 1999
1998
Best Buy Annual Report, Year Ended Feb 28, 1998
Best Buy Co., Inc. (the Company) reported fiscal 1998 (year ended February 28, 1998) revenues of $8.358 billion, up from $7.771 billion in fiscal 1997, with comparable store sales up 2%. Net earnings rose to $94.5 million, or $1.04 per diluted share, compared with $1.7 million in fiscal 1997. Operating income was $186.9 million versus $53.2 million a year earlier, driven mainly by a higher gross profit margin of 15.9% (13.6% in fiscal 1997), which management attributed to improved inventory management, faster inventory turns (5.6 times versus 4.6), and a more profitable product assortment. SG&A rose to 13.7% of sales from 12.9%, reflecting higher service, compensation and professional costs. The balance sheet strengthened considerably. Cash and cash equivalents increased to $520.1 million from $89.8 million, operating cash flow was $542.4 million, and merchandise inventories fell to $1.06 billion. Interest expense declined to $33.0 million from $50.3 million, and the Company had essentially no borrowings under its revolving credit facility during the year. Shareholders' equity rose to $557.7 million, and management said conversion of the $230 million convertible preferred securities would increase equity to nearly $780 million. Looking ahead, the Company plans to open about 25 new stores in fiscal 1999, reaching approximately 309 stores, including entry into New England, and expects capital spending of about $140 million. Management expects continued pressure on wages and SG&A as a percentage of sales, and estimates Year 2000 remediation costs of about $10 million, mostly in fiscal 1999.
May 28, 1998
1997
Best Buy Annual Report, Year Ended Mar 31, 1997
Best Buy Co., Inc. reported fiscal 1997 (ended March 1, 1997) revenues of $7.77 billion, up 8% from $7.22 billion in fiscal 1996, but net earnings collapsed to $1.7 million, or $.04 per share, versus $48.0 million, or $1.10 per share, a year earlier. The Company attributed the decline to a difficult consumer electronics and personal computer environment, a 5% comparable store sales decline, and pressure on gross margins and operating expenses. Operating income fell to $53.2 million from $122.6 million, and SG&A rose to 12.9% of sales from 11.3%. The filing notes a $15 million pre-tax inventory write-down on personal computers in the third quarter and a $10 million markdown reserve addition for recorded music in the fourth quarter. The company curtailed expansion in fiscal 1997, opening 21 stores to reach 272 at year end, and plans only 13 new stores in fiscal 1998, with management expecting comparable store sales to decline again and a loss in the first half of fiscal 1998 but improved earnings for the full year. Cash used in operating activities was $20.4 million, and the Company violated its interest coverage covenant in the third quarter of fiscal 1997; the lenders waived the violation and amended the covenant through the second quarter of fiscal 1998. Total assets declined to $1.73 billion from $1.89 billion, and shareholders' equity was $438.3 million. For investors, the central issues are margin recovery, covenant compliance under its credit facilities, and whether the planned slowdown in store growth and inventory improvements can restore profitability. Management stated that sufficient alternative working capital financing is believed to be available for fiscal 1998 operations, but noted there can be no assurance it will meet the covenants.
May 28, 1997
1994
Best Buy Annual Report, Year Ended Feb 26, 1994
Best Buy Co., Inc. (BBY) reported fiscal 1994 results for the year ended February 26, 1994, in which revenues rose 86% to $3.007 billion from $1.620 billion in fiscal 1993, and earnings increased 110% to $41.7 million before a cumulative effect adjustment. Net earnings were $41.3 million, or $1.00 per share after the $425 thousand FAS 109 charge. Operating income as a percentage of sales rose to 2.6% from 2.2%, as the decline in selling, general and administrative expenses to 12.6% of sales more than offset a lower gross profit margin of 15.2%. Comparable store sales rose 27%, driven by a 69% comparable increase in computer sales. Home office products grew to 35% of sales from 27%. The company operated 151 stores in 18 states at year end, opened 40 stores in fiscal 1994, and planned about 50 openings in fiscal 1995, including entries into Charlotte, Cleveland, Orlando, Washington, D.C., Los Angeles and Las Vegas. Fiscal 1995 capital expenditures were planned at $200 million, with about $130 million expected to be recovered through sale/leaseback or other long-term lease financing. Balance sheet changes were significant: merchandise inventories rose to $637.95 million from $249.99 million, and long-term debt reached $210.8 million, including $150 million of 8-5/8% senior subordinated notes due 2000. The company has never paid cash dividends and does not intend to pay them in the foreseeable future. The filing also describes Concept II, a self-service discount store format, and a private label credit card program with over 700,000 cardholders holding more than $1.5 billion in available credit. Management expects competition to keep pressure on margins, while expecting SG&A to continue declining as a percentage of sales.
May 20, 1994