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Best Buy 8-K Report, Financial Results (May 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 30, 2024
Period End
May 30, 2024
Security
BBY
In the record · 2016–202610-K1110-Q328-K109

BBY filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 109 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’16Jun ’16
  2. Leadership change8-K · Apr ’19Apr ’19
  3. Material agreement8-K · May ’21May ’21
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed May 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Best Buy Co., Inc. reported first-quarter results for the 13-week period ended May 4, 2024 (Q1 FY25).

Revenue was $8.85 billiona, down from $9.47 billion a year earlier, with enterprise comparable sales declining 6.1%. GAAP diluted EPS rose to $1.13 from $1.11, and non-GAAP diluted EPS rose to $1.20 from $1.15. Management described the quarter's profitability as better than expected, while noting that sales were slightly softer than its expectations amid a challenging macro environment for the category.

The company reaffirmed its FY25 non-GAAP diluted EPS guidance range of $5.75 to $6.20b, which the release labels unchanged. FY25 guidance also calls for revenue of $41.3 billion to $42.6 billion, comparable sales of (3.0%) to 0.0%, an enterprise non-GAAP operating income rate of 3.9% to 4.1%, and capital expenditures of approximately $750 million. For Q2 FY25, the company expects comparable sales to decline by approximately 3% and a non-GAAP operating income rate of approximately 3.5%.

The CFO stated that the company is trending toward the midpoint of its comparable sales guidance. Profitability was supported by a higher Domestic gross profit rate of 23.4%c versus 22.6%, driven by services and membership offerings, partly offset by lower product margins. International gross profit rate fell to 22.8% from 23.7%.

The company incurred $15 milliond of restructuring charges tied to an enterprise-wide initiative and returned $252 million to shareholders in the quarter, including $202 million in dividends. The board authorized a regular quarterly dividend of $0.94 per share, payable July 11, 2024.

02—Key points

Key Highlights

  1. Q1 FY25 revenue of $8,847 million, down from $9,467 million; enterprise comparable sales declined 6.1% (Domestic down 6.3%, International down 3.3%).
  2. GAAP diluted EPS of $1.13 versus $1.11 a year earlier; non-GAAP diluted EPS of $1.20 versus $1.15.
  3. Domestic gross profit rate improved to 23.4% from 22.6%, driven by services and membership offerings; International gross profit rate declined to 22.8% from 23.7%.
  4. FY25 non-GAAP diluted EPS guidance of $5.75 to $6.20 unchanged; revenue guidance of $41.3 billion to $42.6 billion and comparable sales guidance of (3.0%) to 0.0%.
  5. Q2 FY25 outlook calls for comparable sales decline of approximately 3% and non-GAAP operating income rate of approximately 3.5%.
  6. Restructuring charges of $15 million in Q1 FY25; the company does not expect material future restructuring charges from this initiative.
  7. Quarterly dividend of $0.94 per share declared, payable July 11, 2024; $252 million returned to shareholders in Q1 including $50 million in repurchases.

03—Questions

Frequently Asked Questions

  1. How did Best Buy perform in Q1 FY25 compared with the prior year?

    Revenue fell to $8.85 billion from $9.47 billion, and enterprise comparable sales declined 6.1%. Despite lower sales, GAAP diluted EPS increased to $1.13 from $1.11, and non-GAAP diluted EPS increased to $1.20 from $1.15.

  2. Did Best Buy change its full-year FY25 outlook?

    No. The company stated its FY25 non-GAAP diluted EPS guidance of $5.75 to $6.20 is unchanged. It also reported guidance for revenue of $41.3 billion to $42.6 billion, comparable sales of (3.0%) to 0.0%, and an enterprise non-GAAP operating income rate of 3.9% to 4.1%. Management said it expects to trend toward the midpoint of its comparable sales guidance.

  3. What drove the improvement in Domestic profitability?

    The Domestic gross profit rate rose to 23.4% from 22.6%, primarily due to improved financial performance in the services category, including membership offerings. This was partly offset by lower product margin rates and lower profit-sharing revenue from the private label and co-branded credit card arrangement. Domestic SG&A also decreased on lower employee compensation, reduced vehicle rental costs and lower expenses in other areas.

  4. What categories weighed on Q1 sales?

    On a weighted basis, the largest drivers of the Domestic comparable sales decline were appliances, home theater, gaming and mobile phones. Services and laptops partially offset these declines. Domestic Appliances comparable sales declined 18.5% in the quarter.

  5. What shareholder returns did Best Buy announce?

    In Q1 FY25, Best Buy returned $252 million to shareholders, consisting of $202 million in dividends and $50 million in share repurchases. The board authorized a regular quarterly cash dividend of $0.94 per common share, payable July 11, 2024, to shareholders of record as of June 20, 2024.

04—Continue

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