01—Abstract
Summary
Summary of the 10-Q filed September 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Best Buy Co., Inc. reported results for the second quarter of fiscal 2025 (ended August 3, 2024) in this Form 10-Q filed September 6, 2024.
Revenue was $9.29 billiona for the quarter, down 3.1%, and $18.14 billion for the first six months, down 4.8%. Comparable sales declined 2.3% in the quarter, an improvement from the 6.1% decline cited for the first quarter. Gross profit rate rose to 23.5% of revenue from 23.2% a year earlier, and SG&A was 19.5% of revenue versus 19.6%.
Operating income was $383 millionb, up from $348 million, and net earnings were $291 million, compared with $274 million. Diluted EPS was $1.34, versus $1.25 in the prior-year quarter. Non-GAAP diluted EPS was $1.34 for the quarter, compared with $1.22 a year earlier, as reconciled in the filing.
Cash provided by operating activities for the first six months was $817 millionc, compared with $181 million a year earlier, driven mainly by the timing and volume of inventory purchases and payments. Capital expenditures are expected to approximate $750 million in fiscal 2025, versus $795 million in fiscal 2024. Management expects total share repurchases of approximately $500 million in fiscal 2025, and $3.6 billion of the $5.0 billion authorization remained available as of August 3, 2024.
The company also reported that Domestic tablet and computing categories grew while appliances, home theater and gaming declined, and that it expects to close approximately 10 to 15 Domestic Best Buy stores in fiscal 2025. The balance sheet showed cash and cash equivalents of $1.39 billiond, merchandise inventories of $5.71 billion, and long-term debt of $1.16 billion ($1.15 billion non-current), with total equity of $3.11 billion.
The company had $1.25 billion undrawn under its revolving credit facility. Its restructuring initiative is expected to produce no material future charges, according to the filing.
02—Key points
Key Highlights
- Revenue of $9.29 billion in the second quarter, down 3.1%; six-month revenue of $18.14 billion, down 4.8%.
- Comparable sales declined 2.3% in the quarter, improving from the 6.1% decline in the first quarter of fiscal 2025.
- Operating income rose to $383 million from $348 million, with operating margin of 4.1% versus 3.6% a year earlier.
- Diluted EPS of $1.34 compared with $1.25 a year earlier; non-GAAP diluted EPS of $1.34 versus $1.22.
- Operating cash flow for the first six months was $817 million, versus $181 million in the prior-year period.
- Fiscal 2025 capital expenditures are expected to be about $750 million, and share repurchases about $500 million.
- Domestic tablet and computing categories grew, while appliances, home theater and gaming declined; about 10 to 15 Domestic stores are expected to close in fiscal 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Best Buy kept $0.03.
- Revenue$9.29B100.0%
- Cost of revenue−$7.10B76.5%
- Gross profit$2.19B23.5%
- Operating costs−$1.80B19.4%
- Operating income$383.0M4.1%
- Interest, other & tax−$92.0M1.0%
- Net income$291.0M3.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed September 6, 2024Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $9.29B$9.58B | −3.1% |
| Cost of Revenue | $7.10B$7.36B | −3.5% |
| Gross Profit | $2.19B$2.22B | −1.5% |
| SG&A Expenses | $1.81B$1.88B | −3.7% |
| Operating Income | $383.00M$348.00M | +10.1% |
| Interest Expense | $13.00M$12.00M | +8.3% |
| Net Income | $291.00M$274.00M | +6.2% |
| EPS (Basic) | $1.35$1.25 | +8.0% |
| EPS (Diluted) | $1.34$1.25 | +7.2% |
| Shares Outstanding (Basic) | 216.00M218.60M | −1.2% |
| Shares Outstanding (Diluted) | 217.10M219.00M | −0.9% |
05—Questions
Frequently Asked Questions
How did Best Buy perform in the second quarter of fiscal 2025?
Revenue was $9.29 billion, down 3.1% from the prior year, and comparable sales declined 2.3%. Operating income increased to $383 million, and net earnings were $291 million, compared with $274 million a year earlier.
What drove the change in profitability?
The gross profit rate improved to 23.5% of revenue from 23.2%, primarily in the Domestic segment, due to improved performance in the services category, including membership offerings. Domestic SG&A decreased, mainly from lower employee compensation expense.
How much cash did Best Buy generate and how will it be used?
Operating activities provided $817 million in the first six months of fiscal 2025. The company expects capital expenditures of about $750 million and total share repurchases of approximately $500 million in fiscal 2025. Dividends paid were $405 million in the six-month period.
What are the company's liquidity and debt positions?
As of August 3, 2024, cash and cash equivalents were $1.39 billion, and long-term debt totaled $1.16 billion including current portion. The company had no borrowings under its $1.25 billion five-year revolving credit facility, which expires in April 2028.
What restructuring and store actions are underway?
An enterprise-wide restructuring initiative begun in the fourth quarter of fiscal 2024 had cumulative charges of $181 million as of August 3, 2024, and the company does not expect material future charges from it. The company expects to close approximately 10 to 15 Domestic Best Buy stores in fiscal 2025.
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