01—Abstract
Summary
Summary of the 10-K filed March 15, 2024. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. (BBY) reported fiscal 2024, a 53-week year ended February 3, 2024, with revenue of $43.45 billiona, 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 billionb 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 $6.37c, 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 $0.94d 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.
02—Key points
Key Highlights
- Revenue declined 6.1% to $43.45 billion in fiscal 2024, and comparable sales fell 6.8%.
- Operating income was $1.57 billion (3.6% of revenue) versus $1.80 billion in fiscal 2023; net earnings were $1.24 billion versus $1.42 billion.
- Diluted EPS was $5.68 versus $6.29; non-GAAP diluted EPS was $6.37 versus $7.08.
- Domestic comparable sales fell 7.1%, with Computing and Mobile Phones (42% of Domestic revenue) down 7.8% and Appliances down 15.1%; Services grew 8.7%.
- Operating cash flow was $1.47 billion, down from $1.82 billion, and capital expenditures were $795 million.
- Fiscal 2024 Restructuring Initiative recorded $153 million of restructuring charges, and the company expects to close approximately 10 to 15 Best Buy stores in fiscal 2025.
- Quarterly dividend increased 2% to $0.94 per share; the company repurchased $340 million of stock during the year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Best Buy kept $0.03.
- Revenue$43.45B100.0%
- Cost of revenue−$33.85B77.9%
- Gross profit$9.60B22.1%
- Operating costs−$8.03B18.5%
- Operating income$1.57B3.6%
- Interest, other & tax−$333.0M0.8%
- Net income$1.24B2.9%
Where FY2024 revenue went
$43.45B- Cost of revenue: $33.85B, 78% of revenue
- SG&A: $7.88B, 18% of revenue
- Net income: $1.24B, 2.9% of revenue
- Interest, other & tax: $333.0M, 0.8% of revenue
Kept 2.9% as net incomeNet income $1.24B · 2.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 15, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $43.45B$46.30B | −6.1% |
| Cost of Revenue | $33.85B$36.39B | −7.0% |
| Gross Profit | $9.60B$9.91B | −3.1% |
| SG&A Expenses | $7.88B$7.97B | −1.2% |
| Operating Income | $1.57B$1.79B | −12.3% |
| Interest Expense | $52.00M$35.00M | +48.6% |
| Net Income | $1.24B$1.42B | −12.5% |
| EPS (Basic) | $5.70$6.31 | −9.7% |
| EPS (Diluted) | $5.68$6.29 | −9.7% |
| Shares Outstanding (Basic) | 217.70M224.80M | −3.2% |
| Shares Outstanding (Diluted) | 218.50M225.70M | −3.2% |
05—Questions
Frequently Asked Questions
Why did Best Buy's revenue and earnings decline in fiscal 2024?
The filing attributes the comparable sales decline of 6.8% to a consumer electronics industry challenged by high inflation, increased spending outside the home in areas such as travel and entertainment, the pull-forward of demand in prior years and lower levels of product innovation. Lower sales volume also reduced leverage on fixed expenses, which pressured the operating income rate.
How did the company's segments perform?
The Domestic segment generated $40.10 billion of revenue, down 6.3%, with operating income of $1.47 billion. The International segment (Canada) generated $3.36 billion of revenue, down 4.3%, with operating income of $107 million. Domestic comparable sales declined 7.1%, while International comparable sales declined 3.2%.
What is Best Buy's liquidity and debt position?
As of February 3, 2024, the company held $1.45 billion in cash and cash equivalents and had no borrowings under its $1.25 billion five-year revolving credit facility. Long-term debt consisted of $500 million of 4.45% notes due 2028 and $650 million of 1.95% notes due 2030. The company stated it was in compliance with all financial covenants.
What did management say about fiscal 2025?
Management said it expects fiscal 2025 to be a year of increasing industry stabilization as innovation increases and consumers begin to upgrade and replace technology bought during the pandemic. The company expects fiscal 2025 capital expenditures of $750 million to $800 million, about $350 million of share repurchases, and additional restructuring charges of approximately $10 million to $30 million.
What are the main risks highlighted in the filing?
The filing highlights macroeconomic pressures and geopolitical tensions, intense competition from multi-channel and e-commerce retailers, reliance on a small number of key vendors (the 20 largest suppliers accounted for about 80% of merchandise purchased), dependence on the fiscal fourth-quarter holiday season, cybersecurity and data privacy risks, and the expansion into health technology services.
06—Continue