UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) November 24, 2020
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BEST BUY CO., INC.
(Exact name of registrant as specified in its charter)
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Minnesota	‌	1-9595	‌	41-0907483	
(State or other jurisdiction
of incorporation)	‌	(Commission
File Number)	‌	(IRS Employer
Identification No.)	
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7601 Penn Avenue South	‌	‌	
Richfield, Minnesota	‌	55423	
(Address of principal executive offices)	‌	(Zip Code)	
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Registrant’s telephone number, including area code (612) 291-1000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	Trading symbol	Name of exchange on which registered	
Common Stock, $0.10 par value per share	BBY	New York Stock Exchange	
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
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Item 2.02 Results of Operations and Financial Condition.
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On November 24, 2020, Best Buy Co., Inc. (“Best Buy” or the “registrant”) issued a news release announcing its results of operations for the third quarter ended October 31, 2020.
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The registrant is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on November 24, 2020. The earnings conference call is expected to be available live on the registrant’s website at www.investors.bestbuy.com.
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The news release issued on November 24, 2020, is furnished as Exhibit 99 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that Section unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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Item 9.01 Financial Statements and Exhibits.
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(d) Exhibits.
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The following are furnished as Exhibits to this Current Report on Form 8-K.

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Exhibit No.	‌	Description of Exhibit	
99	‌	News release issued November 24, 2020 (furnished pursuant to Item 2.02). Any internet address provided in this release is for information purposes only and is not intended to be a hyperlink. Accordingly, no information at any internet address is included herein.	
104	‌	Cover Page Interactive Data File (embedded within the Inline XBRL document).	
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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‌	‌	BEST BUY CO., INC.	
‌	‌	(Registrant)	
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Date: November 24, 2020	By:	/s/ MATHEW R. WATSON	
‌	‌	Mathew R. Watson	
‌	‌	Senior Vice President, Finance – Controller and Chief Accounting Officer	
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Exhibit 99

Best Buy Reports Third Quarter Results
Enterprise Comparable Sales Increased 23%
Domestic Comparable Online Sales Increased 174%
GAAP Diluted EPS Increased 35% to $1.48
Non-GAAP Diluted EPS Increased 82% to $2.06
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MINNEAPOLIS, November 24, 2020 -- Best Buy Co., Inc. (NYSE: BBY) today announced results for the 13-week third quarter ended October 31, 2020 (“Q3 FY21”), as compared to the 13-week third quarter ended November 2, 2019 (“Q3 FY20”).
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﻿	 	 	 	 	 	 	
﻿	Q3 FY21	Q3 FY20	
Revenue ($ in millions)	 	 	 	 	 	 	
Enterprise	$	11,853 	 	$	9,764 	 	
Domestic segment	$	10,850 	 	$	8,964 	 	
International segment	$	1,003 	 	$	800 	 	
Enterprise comparable sales % change1	 	23.0 	%	 	1.7 	%	
Domestic comparable sales % change1	 	22.6 	%	 	2.0 	%	
Domestic comparable online sales % change1	 	173.7 	%	 	15.0 	%	
International comparable sales % change1	 	27.3 	%	 	(1.9)	%	
Operating Income	 	 	 	 	 	 	
GAAP operating income as a % of revenue	 	4.7 	%	 	4.0 	%	
Non-GAAP operating income as a % of revenue	 	6.1 	%	 	4.2 	%	
Diluted Earnings per Share ("EPS")	 	 	 	 	 	 	
GAAP diluted EPS	$	1.48 	 	$	1.10 	 	
Non-GAAP diluted EPS	$	2.06 	 	$	1.13 	 	
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For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.
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“Today, we are once again reporting strong quarterly results in the midst of unprecedented times,” said Corie Barry, Best Buy CEO. “Our comparable sales grew a remarkable 23% as we leveraged our unique capabilities, including our supply chain expertise, flexible store operating model and ability to shift quickly to digital, to meet what is clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes. The current environment has underscored our purpose to enrich lives through technology, and the capabilities we are flexing and strengthening now will benefit us going forward as we execute our strategy.”
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Barry continued, “Our teams showed empathy, ingenuity and extraordinary execution throughout the quarter. I am very proud of the way our teammates are helping not only our customers, but each other and their communities.” 
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“From a profitability standpoint, our better-than-expected sales resulted in significant operating income rate expansion and earnings growth,” Barry continued. “This strong financial performance is allowing us to share our success with the community, our shareholders, and, importantly, our employees. We recently made a $40 million donation to the Best Buy Foundation to accelerate the progress towards our goal to reach 100 Teen Tech Centers across the U.S. In addition, we plan on resuming our share repurchase program during Q4 of this fiscal year.”

 
 
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Barry continued, “For our employees, we raised our starting wage to $15 per hour, paid recognition bonuses to field employees and reinstated our short-term incentive compensation. In the early days of the pandemic, we established an employee hardship fund that continues to provide emergency funds to our employees who are sick, have loved ones who are sick or are experiencing financial hardship. In addition, in recent weeks, we have resumed our 401(k) employer match and invested significantly in our employee well-being benefits.”
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Best Buy CFO Matt Bilunas said, “While the demand for the products and services we sell remains at elevated levels as we start the fourth quarter, it is very difficult for us to predict how sustainable these trends will be due to the significant uncertainty related to the various impacts of the pandemic. Thus, similar to the last two quarters, we are not providing financial guidance today.”
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Domestic Segment Q3 FY21 Results
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Domestic Revenue
Domestic revenue of $10.85 billion increased 21.0% versus last year. The increase was primarily driven by comparable sales growth of 22.6%, which was partially offset by the loss of revenue from permanent store closures in the past year.
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From a merchandising perspective, the company generated comparable sales growth across most of its categories, with the largest drivers being computing, home theater and appliances. These growth drivers were partially offset by a decline in mobile phone sales.
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Domestic online revenue of $3.82 billion increased 173.7% on a comparable basis, and as a percentage of total Domestic revenue, online revenue increased to approximately 35.2% versus 15.6% last year. 
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Domestic Gross Profit Rate
Domestic gross profit rate was 24.0% versus 24.3% last year. The gross profit rate decrease of approximately 30 basis points was primarily driven by higher supply chain costs as a result of the increased mix of online revenue and lower profit-sharing revenue from the company’s private-label and co-branded credit card arrangement. These pressures were partially offset by a more favorable promotional environment.
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Domestic Selling, General and Administrative Expenses (“SG&A”)
Domestic GAAP SG&A was $1.95 billion, or 18.0% of revenue, versus $1.80 billion, or 20.1% of revenue, last year. On a non-GAAP basis, SG&A was $1.93 billion, or 17.8% of revenue, versus $1.78 billion, or 19.9% of revenue, last year. Both GAAP and non-GAAP SG&A increased primarily due to: (1) increased incentive compensation expense; (2) increased variable expense related to the higher sales growth, including items such as credit card processing fees; and (3) a $40 million donation to the Best Buy Foundation. These items were partially offset by lower store payroll expense.
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International Segment Q3 FY21 Results
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International Revenue
International revenue of $1.0 billion increased 25.4% versus last year. This increase was primarily driven by comparable sales growth of 27.3%, which was partially offset by the impact of approximately 140 basis points of negative foreign currency exchange rates. 
 
International Gross Profit Rate
International GAAP gross profit rate was 19.0% versus 22.5% last year. On a non-GAAP basis, the gross profit rate was 22.6% versus 22.5% last year. The lower GAAP gross profit was primarily due to $36 million of inventory markdowns associated with the company’s decision to exit its operations in Mexico.

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International SG&A
International SG&A was $175 million, or 17.4% of revenue, versus $173 million, or 21.6% of revenue, last year. SG&A increased primarily due to higher incentive compensation in Canada.
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Restructuring Charges
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Restructuring charges of $111 million in Q3 FY21 primarily related to charges associated with the company’s decision this quarter to exit operations in Mexico and actions to better align its organizational structure with its strategic focus.
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Dividends and Share Repurchases
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In Q3 FY21, the company returned a total of $142 million to shareholders through dividends. On a year-to-date basis, the company has returned a total of $488 million to shareholders through dividends of $426 million and share repurchases of $62 million. The company suspended share repurchases last March in order to conserve liquidity in light of the COVID-related uncertainties and plans to resume share repurchases during Q4 FY21.
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Today, the company announced its board of directors has authorized the payment of a regular quarterly cash dividend of $0.55 per common share. The quarterly dividend is payable on January 5, 2021, to shareholders of record as of the close of business on December 15, 2020.
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Bond Offering
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In Q3 FY21, the company completed a public bond offering for $650 million in 1.95% notes due in October 2030. The net proceeds from the sale will be used to replace the $650 million in 5.5% notes that mature in March 2021, which the company expects to retire during Q4 FY21 by exercising its option to redeem the 5.5% notes at par.
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Conference Call
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Best Buy is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on November  24, 2020. A webcast of the call is expected to be available at www.investors.bestbuy.com,  both live and after the call.
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Notes:
(1) Comparable sales include revenue from all stores that were temporarily closed or operating an enhanced curbside-only operating model in Q3 FY21 as a result of COVID-19. The method of calculating comparable sales varies across the retail industry, including the treatment of store closures as a result of COVID-19. As a result, our method of calculating comparable sales may not be the same as other retailers’ methods. For additional information on comparable sales, please see our most recent Annual Report on Form 10-K, and any subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission, and available at www.investors.bestbuy.com.
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Forward-Looking and Cautionary Statements:
This 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,” “foresee,” “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: the duration and scope of the COVID-19 pandemic and its

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resurgence and the impact on demand for our products and services, levels of consumer confidence and our supply chain; the effects and duration of steps we have taken and will continue to take in response to the pandemic, including the implementation of our interim and evolving operating model; actions governments, businesses and individuals have taken and will continue to take in response to the pandemic and their impact on economic activity and consumer spending; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; competition (including from multi-channel retailers, e-commerce business, technology service providers, traditional store-based retailers, vendors and mobile network carriers), our expansion strategies, our focus on services as a strategic priority, our reliance on key vendors and mobile network carriers, our ability to attract and retain qualified employees, changes in market compensation rates, risks arising from statutory, regulatory and legal developments, macroeconomic pressures in the markets in which we operate, failure to effectively manage our costs, our reliance on our information technology systems, our ability to prevent or effectively respond to a privacy or security breach, our ability to effectively manage strategic ventures, alliances or acquisitions, our dependence on cash flows and net earnings generated during the fourth fiscal quarter, susceptibility of our products to technological advancements, product life cycle preferences and changes in consumer preferences, economic or regulatory developments that might affect our ability to provide attractive promotional financing, interruptions and other supply chain issues, catastrophic events, health crises, pandemics, our ability to maintain positive brand perception and recognition, product safety and quality concerns, changes to labor or employment laws or regulations, our ability to effectively manage our real estate portfolio, constraints in the capital markets or our vendor credit terms, changes in our credit ratings, any material disruption in our relationship with or the services of third-party vendors, risks related to our exclusive brand products and risks associated with vendors that source products outside of the U.S., including 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) and risks arising from our international activities.
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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 Annual Report on Form 10-K filed with the SEC on March 23, 2020 and its Quarterly Reports on Form 10-Q filed with the SEC on May 27, 2020 and August 31, 2020. 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.
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Investor Contact:	   Media Contact:	
Mollie O'Brien	   Carly Charlson	
mollie.obrien@bestbuy.com	   carly.charlson@bestbuy.com	
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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	 	Nine Months Ended	
﻿	October 31, 2020	 	November 2, 2019	 	October 31, 2020	 	November 2, 2019	
Revenue	$	11,853 	 	 	$	9,764 	 	 	$	30,325 	 	 	$	28,442 	 	
Cost of sales	 	9,058 	 	 	 	7,403 	 	 	 	23,295 	 	 	 	21,629 	 	
Gross profit	 	2,795 	 	 	 	2,361 	 	 	 	7,030 	 	 	 	6,813 	 	
Gross profit %	 	23.6 	%	 	 	24.2 	%	 	 	23.2 	%	 	 	24.0 	%	
Selling, general and administrative expenses	2,123 	 	 	 	1,973 	 	 	 	5,560 	 	 	 	5,730 	 	
SG&A %	 	17.9 	%	 	 	20.2 	%	 	 	18.3 	%	 	 	20.1 	%	
Restructuring charges	 	111 	 	 	 	(7)	 	 	 	112 	 	 	 	41 	 	
Operating income	 	561 	 	 	 	395 	 	 	 	1,358 	 	 	 	1,042 	 	
Operating income %	 	4.7 	%	 	 	4.0 	%	 	 	4.5 	%	 	 	3.7 	%	
Other income (expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain on sale of investments	 	 -	 	 	 	1 	 	 	 	 -	 	 	 	1 	 	
Investment income and other	 	5 	 	 	 	9 	 	 	 	19 	 	 	 	33 	 	
Interest expense	 	(11)	 	 	 	(16)	 	 	 	(43)	 	 	 	(50)	 	
Earnings before income tax expense	 	555 	 	 	 	389 	 	 	 	1,334 	 	 	 	1,026 	 	
Income tax expense	 	164 	 	 	 	96 	 	 	 	352 	 	 	 	230 	 	
Effective tax rate	 	29.6 	%	 	 	24.8 	%	 	 	26.4 	%	 	 	22.5 	%	
Net earnings	$	391 	 	 	$	293 	 	 	$	982 	 	 	$	796 	 	
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Basic earnings per share	$	1.50 	 	 	$	1.11 	 	 	$	3.79 	 	 	$	2.99 	 	
Diluted earnings per share	$	1.48 	 	 	$	1.10 	 	 	$	3.74 	 	 	$	2.96 	 	
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Weighted-average common shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	259.8 	 	 	 	263.2 	 	 	 	259.3 	 	 	 	266.0 	 	
Diluted	 	263.7 	 	 	 	265.2 	 	 	 	262.5 	 	 	 	269.1 	 	
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BEST BUY CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited and subject to reclassification)
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﻿	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
﻿	October 31, 2020	 	November 2, 2019	
Assets	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	
Cash and cash equivalents	$	5,136 	 	 	$	1,205 	
Short-term investments	 	545 	 	 	 	 -	
Receivables, net	 	1,028 	 	 	 	1,056 	
Merchandise inventories	 	7,459 	 	 	 	7,569 	
Other current assets	 	383 	 	 	 	345 	
Total current assets	 	14,551 	 	 	 	10,175 	
Property and equipment, net	 	2,265 	 	 	 	2,359 	
Operating lease assets	 	2,692 	 	 	 	2,751 	
Goodwill	 	986 	 	 	 	982 	
Other assets	 	708 	 	 	 	659 	
Total assets	$	21,202 	 	 	$	16,926 	
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Liabilities and equity	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	
Accounts payable	$	9,110 	 	 	$	7,232 	
Unredeemed gift card liabilities	 	278 	 	 	 	271 	
Deferred revenue	 	788 	 	 	 	445 	
Accrued compensation and related expenses	 	446 	 	 	 	351 	
Accrued liabilities	 	968 	 	 	 	769 	
Current portion of operating lease liabilities	 	685 	 	 	 	644 	
Current portion of long-term debt	 	670 	 	 	 	14 	
Total current liabilities	 	12,945 	 	 	 	9,726 	
Long-term operating lease liabilities	 	2,117 	 	 	 	2,200 	
Long-term liabilities	 	798 	 	 	 	636 	
Long-term debt	 	1,256 	 	 	 	1,239 	
Equity	 	4,086 	 	 	 	3,125 	
Total liabilities and equity	$	21,202 	 	 	$	16,926 	
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BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited and subject to reclassification)
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﻿	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	
﻿	Nine Months Ended	
﻿	October 31, 2020	 	November 2, 2019	
Operating activities	 	 	 	 	 	 	 	
Net earnings	$	982 	 	 	$	796 	 	
Adjustments to reconcile net earnings to total cash provided by operating activities:	 	 	 	 	 	
Depreciation and amortization	 	628 	 	 	 	607 	 	
Restructuring charges	 	112 	 	 	 	41 	 	
Stock-based compensation	 	107 	 	 	 	109 	 	
Deferred income taxes	 	19 	 	 	 	20 	 	
Other, net	 	10 	 	 	 	16 	 	
Changes in operating assets and liabilities, net of acquired assets and liabilities:	 	 	 	 	 	
Receivables	 	106 	 	 	 	(36)	 	
Merchandise inventories	 	(2,300)	 	 	 	(2,159)	 	
Other assets	 	(60)	 	 	 	(2)	 	
Accounts payable	 	3,824 	 	 	 	1,984 	 	
Income taxes	 	121 	 	 	 	(147)	 	
Other liabilities	 	358 	 	 	 	(292)	 	
Total cash provided by operating activities	 	3,907 	 	 	 	937 	 	
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Investing activities	 	 	 	 	 	 	 	
Additions to property and equipment	 	(534)	 	 	 	(586)	 	
Purchases of investments	 	(620)	 	 	 	(319)	 	
Sales of investments	 	 -	 	 	 	322 	 	
Acquisitions, net of cash acquired	 	 -	 	 	 	(145)	 	
Other, net	 	1 	 	 	 	1 	 	
Total cash used in investing activities	 	(1,153)	 	 	 	(727)	 	
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Financing activities	 	 	 	 	 	 	 	
Repurchase of common stock	 	(62)	 	 	 	(696)	 	
Issuance of common stock	 	28 	 	 	 	45 	 	
Dividends paid	 	(426)	 	 	 	(398)	 	
Borrowings of debt	 	1,892 	 	 	 	 -	 	
Repayments of debt	 	(1,261)	 	 	 	(11)	 	
Other, net	 	(1)	 	 	 	 -	 	
Total cash provided by (used in) financing activities	 	170 	 	 	 	(1,060)	 	
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Effect of exchange rate changes on cash and cash equivalents	 	(8)	 	 	 	(2)	 	
Increase (decrease) in cash, cash equivalents and restricted cash	 	2,916 	 	 	 	(852)	 	
Cash, cash equivalents and restricted cash at beginning of period	 	2,355 	 	 	 	2,184 	 	
Cash, cash equivalents and restricted cash at end of period	$	5,271 	 	 	$	1,332 	 	
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BEST BUY CO., INC.
SEGMENT INFORMATION
($ in millions)
(Unaudited and subject to reclassification)
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﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Nine Months Ended	
Domestic Segment Results	October 31, 2020	 	November 2, 2019	 	October 31, 2020	 	November 2, 2019	
Revenue	$	10,850 	 	 	$	8,964 	 	 	$	27,893 	 	 	$	26,266 	 	
Comparable sales % change	 	22.6 	%	 	 	2.0 	%	 	 	7.5 	%	 	 	1.8 	%	
Comparable online sales % change	 	173.7 	%	 	 	15.0 	%	 	 	191.4 	%	 	 	15.6 	%	
Gross profit	$	2,604 	 	 	$	2,181 	 	 	$	6,509 	 	 	$	6,303 	 	
Gross profit as a % of revenue	 	24.0 	%	 	 	24.3 	%	 	 	23.3 	%	 	 	24.0 	%	
SG&A	$	1,948 	 	 	$	1,800 	 	 	$	5,087 	 	 	$	5,233 	 	
SG&A as a % of revenue	 	18.0 	%	 	 	20.1 	%	 	 	18.2 	%	 	 	19.9 	%	
Operating income	$	612 	 	 	$	388 	 	 	$	1,377 	 	 	$	1,029 	 	
Operating income as a % of revenue	 	5.6 	%	 	 	4.3 	%	 	 	4.9 	%	 	 	3.9 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Domestic Segment Non-GAAP Results1	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	$	2,604 	 	 	$	2,181 	 	 	$	6,509 	 	 	$	6,303 	 	
Gross profit as a % of revenue	 	24.0 	%	 	 	24.3 	%	 	 	23.3 	%	 	 	24.0 	%	
SG&A	$	1,928 	 	 	$	1,782 	 	 	$	5,027 	 	 	$	5,177 	 	
SG&A as a % of revenue	 	17.8 	%	 	 	19.9 	%	 	 	18.0 	%	 	 	19.7 	%	
Operating income	$	676 	 	 	$	399 	 	 	$	1,482 	 	 	$	1,126 	 	
Operating income as a % of revenue	 	6.2 	%	 	 	4.5 	%	 	 	5.3 	%	 	 	4.3 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Nine Months Ended	
International Segment Results	October 31, 2020	 	November 2, 2019	 	October 31, 2020	 	November 2, 2019	
Revenue	$	1,003 	 	 	$	800 	 	 	$	2,432 	 	 	$	2,176 	 	
Comparable sales % change	 	27.3 	%	 	 	(1.9)	%	 	 	15.1 	%	 	 	(1.7)	%	
Gross profit	$	191 	 	 	$	180 	 	 	$	521 	 	 	$	510 	 	
Gross profit as a % of revenue	 	19.0 	%	 	 	22.5 	%	 	 	21.4 	%	 	 	23.4 	%	
SG&A	$	175 	 	 	$	173 	 	 	$	473 	 	 	$	497 	 	
SG&A as a % of revenue	 	17.4 	%	 	 	21.6 	%	 	 	19.4 	%	 	 	22.8 	%	
Operating income (loss)	$	(51)	 	 	$	7 	 	 	$	(19)	 	 	$	13 	 	
Operating income (loss) as a % of revenue	 	(5.1)	%	 	 	0.9 	%	 	 	(0.8)	%	 	 	0.6 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
International Segment Non-GAAP Results1	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	$	227 	 	 	$	180 	 	 	$	557 	 	 	$	510 	 	
Gross profit as a % of revenue	 	22.6 	%	 	 	22.5 	%	 	 	22.9 	%	 	 	23.4 	%	
SG&A	$	175 	 	 	$	173 	 	 	$	473 	 	 	$	497 	 	
SG&A as a % of revenue	 	17.4 	%	 	 	21.6 	%	 	 	19.4 	%	 	 	22.8 	%	
Operating income	$	52 	 	 	$	7 	 	 	$	84 	 	 	$	13 	 	
Operating income as a % of revenue	 	5.2 	%	 	 	0.9 	%	 	 	3.5 	%	 	 	0.6 	%	
﻿
(1)For GAAP to non-GAAP reconciliations, please refer to the attached supporting schedule titled Reconciliation of Non-GAAP Financial Measures.

8

 

BEST BUY CO., INC.
REVENUE CATEGORY SUMMARY
(Unaudited and subject to reclassification)
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	
﻿	Revenue Mix	 	Comparable Sales	
﻿	Three Months Ended	 	Three Months Ended	
Domestic Segment	October 31, 2020	 	November 2, 2019	 	October 31, 2020	 	November 2, 2019	
Computing and Mobile Phones	47 	%	 	47 	%	 	21.5 	%	 	3.0 	%	
Consumer Electronics	29 	%	 	30 	%	 	21.1 	%	 	 -	%	
Appliances	14 	%	 	12 	%	 	39.3 	%	 	12.5 	%	
Entertainment	5 	%	 	5 	%	 	17.5 	%	 	(20.8)	%	
Services	5 	%	 	6 	%	 	12.7 	%	 	12.9 	%	
Other	 -	%	 	 -	%	 	N/A	 	 	N/A	 	
Total	100 	%	 	100 	%	 	22.6 	%	 	2.0 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	
﻿	Revenue Mix	 	Comparable Sales	
﻿	Three Months Ended	 	Three Months Ended	
International Segment	October 31, 2020	 	November 2, 2019	 	October 31, 2020	 	November 2, 2019	
Computing and Mobile Phones	53 	%	 	51 	%	 	35.7 	%	 	(0.3)	%	
Consumer Electronics	27 	%	 	29 	%	 	13.3 	%	 	1.2 	%	
Appliances	9 	%	 	8 	%	 	40.1 	%	 	(1.5)	%	
Entertainment	5 	%	 	5 	%	 	35.6 	%	 	(31.1)	%	
Services	5 	%	 	6 	%	 	4.3 	%	 	11.5 	%	
Other	1 	%	 	1 	%	 	22.0 	%	 	(28.2)	%	
Total	100 	%	 	100 	%	 	27.3 	%	 	(1.9)	%	
﻿

9

 

﻿
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 financial measures. Generally, presented non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill impairments, gains and losses on investments, intangible asset amortization, 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 financial measures as presented herein may not be comparable to similarly titled measures used by other companies.
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Three Months Ended	
﻿	October 31, 2020	 	November 2, 2019	
﻿	Domestic	 	International	 	Consolidated	 	Domestic	 	International	 	Consolidated	
Gross profit	$	2,604 	 	 	$	191 	 	 	$	2,795 	 	 	$	2,181 	 	 	$	180 	 	 	$	2,361 	 	
% of revenue	 	24.0 	%	 	 	19.0 	%	 	 	23.6 	%	 	 	24.3 	%	 	 	22.5 	%	 	 	24.2 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	36 	 	 	 	36 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Non-GAAP gross profit	$	2,604 	 	 	$	227 	 	 	$	2,831 	 	 	$	2,181 	 	 	$	180 	 	 	$	2,361 	 	
% of revenue	 	24.0 	%	 	 	22.6 	%	 	 	23.9 	%	 	 	24.3 	%	 	 	22.5 	%	 	 	24.2 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
SG&A	$	1,948 	 	 	$	175 	 	 	$	2,123 	 	 	$	1,800 	 	 	$	173 	 	 	$	1,973 	 	
% of revenue	 	18.0 	%	 	 	17.4 	%	 	 	17.9 	%	 	 	20.1 	%	 	 	21.6 	%	 	 	20.2 	%	
Intangible asset amortization2	 	(20)	 	 	 	 -	 	 	 	(20)	 	 	 	(18)	 	 	 	 -	 	 	 	(18)	 	
Non-GAAP SG&A	$	1,928 	 	 	$	175 	 	 	$	2,103 	 	 	$	1,782 	 	 	$	173 	 	 	$	1,955 	 	
% of revenue	 	17.8 	%	 	 	17.4 	%	 	 	17.7 	%	 	 	19.9 	%	 	 	21.6 	%	 	 	20.0 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	$	612 	 	 	$	(51)	 	 	$	561 	 	 	$	388 	 	 	$	7 	 	 	$	395 	 	
% of revenue	 	5.6 	%	 	 	(5.1)	%	 	 	4.7 	%	 	 	4.3 	%	 	 	0.9 	%	 	 	4.0 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	36 	 	 	 	36 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Intangible asset amortization2	 	20 	 	 	 	 -	 	 	 	20 	 	 	 	18 	 	 	 	 -	 	 	 	18 	 	
Restructuring charges3	 	44 	 	 	 	67 	 	 	 	111 	 	 	 	(7)	 	 	 	 -	 	 	 	(7)	 	
Non-GAAP operating income	$	676 	 	 	$	52 	 	 	$	728 	 	 	$	399 	 	 	$	7 	 	 	$	406 	 	
% of revenue	 	6.2 	%	 	 	5.2 	%	 	 	6.1 	%	 	 	4.5 	%	 	 	0.9 	%	 	 	4.2 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	 	 	 	 	 	 	 	 	 	29.6 	%	 	 	 	 	 	 	 	 	 	 	24.8 	%	
Intangible asset amortization2	 	 	 	 	 	 	 	 	 	(1.5)	%	 	 	 	 	 	 	 	 	 	 	0.1 	%	
Restructuring charges3	 	 	 	 	 	 	 	 	 	(3.2)	%	 	 	 	 	 	 	 	 	 	 	(0.1)	%	
Non-GAAP effective tax rate	 	 	 	 	 	 	 	 	 	24.9 	%	 	 	 	 	 	 	 	 	 	 	24.8 	%	
﻿
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Three Months Ended	
﻿	October 31, 2020	 	November 2, 2019	
﻿	Pretax Earnings	 	Net of Tax4	 	Per Share	 	Pretax Earnings	 	Net of Tax4	 	Per Share	
GAAP diluted EPS	 	 	 	 	 	 	 	 	$	1.48 	 	 	 	 	 	 	 	 	 	 	$	1.10 	 	
Restructuring - inventory markdowns1	$	36 	 	 	$	36 	 	 	 	0.14 	 	 	$	 -	 	 	$	 -	 	 	 	 -	 	
Intangible asset amortization2	 	20 	 	 	 	15 	 	 	 	0.06 	 	 	 	18 	 	 	 	14 	 	 	 	0.05 	 	
Restructuring charges3	 	111 	 	 	 	100 	 	 	 	0.38 	 	 	 	(7)	 	 	 	(5)	 	 	 	(0.02)	 	
Gain on investments, net	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(1)	 	 	 	(1)	 	 	 	 -	 	
Non-GAAP diluted EPS	 	 	 	 	 	 	 	 	$	2.06 	 	 	 	 	 	 	 	 	 	 	$	1.13 	 	
﻿
﻿
﻿
﻿

10

 
 
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Nine Months Ended	 	Nine Months Ended	
﻿	October 31, 2020	 	November 2, 2019	
﻿	Domestic	 	International	 	Consolidated	 	Domestic	 	International	 	Consolidated	
Gross profit	$	6,509 	 	 	$	521 	 	 	$	7,030 	 	 	$	6,303 	 	 	$	510 	 	 	$	6,813 	 	
% of revenue	 	23.3 	%	 	 	21.4 	%	 	 	23.2 	%	 	 	24.0 	%	 	 	23.4 	%	 	 	24.0 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	36 	 	 	 	36 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Non-GAAP gross profit	$	6,509 	 	 	$	557 	 	 	$	7,066 	 	 	$	6,303 	 	 	$	510 	 	 	$	6,813 	 	
% of revenue	 	23.3 	%	 	 	22.9 	%	 	 	23.3 	%	 	 	24.0 	%	 	 	23.4 	%	 	 	24.0 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
SG&A	$	5,087 	 	 	$	473 	 	 	$	5,560 	 	 	$	5,233 	 	 	$	497 	 	 	$	5,730 	 	
% of revenue	 	18.2 	%	 	 	19.4 	%	 	 	18.3 	%	 	 	19.9 	%	 	 	22.8 	%	 	 	20.1 	%	
Intangible asset amortization2	 	(60)	 	 	 	 -	 	 	 	(60)	 	 	 	(53)	 	 	 	 -	 	 	 	(53)	 	
Acquisition-related transaction costs2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(3)	 	 	 	 -	 	 	 	(3)	 	
Non-GAAP SG&A	$	5,027 	 	 	$	473 	 	 	$	5,500 	 	 	$	5,177 	 	 	$	497 	 	 	$	5,674 	 	
% of revenue	 	18.0 	%	 	 	19.4 	%	 	 	18.1 	%	 	 	19.7 	%	 	 	22.8 	%	 	 	19.9 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	$	1,377 	 	 	$	(19)	 	 	$	1,358 	 	 	$	1,029 	 	 	$	13 	 	 	$	1,042 	 	
% of revenue	 	4.9 	%	 	 	(0.8)	%	 	 	4.5 	%	 	 	3.9 	%	 	 	0.6 	%	 	 	3.7 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	36 	 	 	 	36 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Intangible asset amortization2	 	60 	 	 	 	 -	 	 	 	60 	 	 	 	53 	 	 	 	 -	 	 	 	53 	 	
Acquisition-related transaction costs2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	3 	 	 	 	 -	 	 	 	3 	 	
Restructuring charges3	 	45 	 	 	 	67 	 	 	 	112 	 	 	 	41 	 	 	 	 -	 	 	 	41 	 	
Non-GAAP operating income	$	1,482 	 	 	$	84 	 	 	$	1,566 	 	 	$	1,126 	 	 	$	13 	 	 	$	1,139 	 	
% of revenue	 	5.3 	%	 	 	3.5 	%	 	 	5.2 	%	 	 	4.3 	%	 	 	0.6 	%	 	 	4.0 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	 	 	 	 	 	 	 	 	 	26.4 	%	 	 	 	 	 	 	 	 	 	 	22.5 	%	
Intangible asset amortization2	 	 	 	 	 	 	 	 	 	(1.1)	%	 	 	 	 	 	 	 	 	 	 	0.1 	%	
Restructuring charges3	 	 	 	 	 	 	 	 	 	(0.8)	%	 	 	 	 	 	 	 	 	 	 	 -	%	
Non-GAAP effective tax rate	 	 	 	 	 	 	 	 	 	24.5 	%	 	 	 	 	 	 	 	 	 	 	22.6 	%	
﻿
﻿
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Nine Months Ended	 	Nine Months Ended	
﻿	October 31, 2020	 	November 2, 2019	
﻿	Pretax Earnings	 	Net of Tax4	 	Per Share	 	Pretax Earnings	 	Net of Tax4	 	Per Share	
GAAP diluted EPS	 	 	 	 	 	 	 	 	$	3.74 	 	 	 	 	 	 	 	 	 	 	$	2.96 	 	
Restructuring - inventory markdowns1	$	36 	 	 	$	36 	 	 	 	0.13 	 	 	$	 -	 	 	$	 -	 	 	 	 -	 	
Intangible asset amortization2	 	60 	 	 	 	45 	 	 	 	0.17 	 	 	 	53 	 	 	 	40 	 	 	 	0.15 	 	
Acquisition-related transaction costs2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	3 	 	 	 	2 	 	 	 	 -	 	
Restructuring charges3	 	112 	 	 	 	101 	 	 	 	0.39 	 	 	 	41 	 	 	 	32 	 	 	 	0.12 	 	
Gain on investments, net	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(1)	 	 	 	(1)	 	 	 	 -	 	
Non-GAAP diluted EPS	 	 	 	 	 	 	 	 	$	4.43 	 	 	 	 	 	 	 	 	 	 	$	3.23 	 	
﻿
(1)Represents inventory markdowns recorded within cost of sales associated with the decision to exit operations in Mexico.
(2)Represents charges associated with acquisitions, including: (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology; and (2) acquisition-related transaction costs primarily comprised of professional fees.
(3)Represents charges related to asset impairments and termination benefits associated with the decision to exit operations in Mexico and other actions to better align the company’s organizational structure with its strategic focus for the periods ended October 31, 2020, and charges and subsequent adjustments related to termination benefits associated with U.S. retail operating model changes for the periods ended November 2, 2019.
(4)The non-GAAP adjustments relate to the U.S. and Mexico. As such, the income tax charge is calculated using the statutory tax rate of 24.5% for all U.S. non-GAAP items for all periods presented. There is no income tax charge for the Mexico non-GAAP items, as there was no tax benefit recognized on these expenses in the calculation of GAAP income tax expense.
﻿
﻿

11

 

Return on Assets and Non-GAAP Return on Investment
﻿
The tables below provide calculations of return on assets ("ROA") (GAAP financial measure) and non-GAAP return on investment (“ROI”) (non-GAAP financial measure) for the periods presented. The company believes ROA is the most directly comparable financial measure to ROI. Non-GAAP ROI is defined as non-GAAP adjusted operating income after tax divided by average invested operating assets. All periods presented below apply this methodology consistently. The company believes non-GAAP ROI is a meaningful metric for investors to evaluate capital efficiency because it measures how key assets are deployed by adjusting operating income and total assets for the items noted below. This method of determining non-GAAP ROI may differ from other companies' methods and therefore may not be comparable to those used by other companies.
﻿
﻿	 	 	 	 	 	 	 	
Return on Assets ("ROA")	October 31, 20201	 	November 2, 20191	
Net earnings	$	1,727 	 	 	$	1,531 	 	
Total assets	 	17,571 	 	 	 	15,219 	 	
ROA	 	9.8 	%	 	 	10.1 	%	
﻿	 	 	 	 	 	 	 	
Non-GAAP Return on Investment ("ROI")	October 31, 20201	 	November 2, 20191	
Numerator	 	 	 	 	 	 	 	
Operating income - total operations	$	2,325 	 	 	$	2,020 	 	
Add: Non-GAAP operating income adjustments2	 	227 	 	 	 	113 	 	
Add: Operating lease interest3	 	112 	 	 	 	112 	 	
Less: Income taxes4	 	(653)	 	 	 	(550)	 	
Add: Depreciation	 	754 	 	 	 	757 	 	
Add: Operating lease amortization5	 	665 	 	 	 	653 	 	
Adjusted operating income after tax	$	3,430 	 	 	$	3,105 	 	
﻿	 	 	 	 	 	 	 	
Denominator	 	 	 	 	 	 	 	
Total assets	$	17,571 	 	 	$	15,219 	 	
Less: Excess cash6	 	(3,164)	 	 	 	(855)	 	
Add: Capitalized operating lease assets7	 	 -	 	 	 	720 	 	
Add: Accumulated depreciation and amortization8	 	7,056 	 	 	 	6,640 	 	
Less: Adjusted current liabilities9	 	(8,724)	 	 	 	(7,940)	 	
Average invested operating assets	$	12,739 	 	 	$	13,784 	 	
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Non-GAAP ROI	 	26.9 	%	 	 	22.5 	%	
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	(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 trailing 12 months ended as of each of the balance sheet dates.	
	(2)		Non-GAAP operating income adjustments include continuing operations adjustments for restructuring charges, intangible asset amortization and acquisition-related transaction costs. Additional details regarding these adjustments are included in the Reconciliation of Non-GAAP Financial Measures schedule within the company's quarterly earnings releases.	
	(3)		Operating lease interest represents the add-back to operating income to approximate the total interest expense that the company would incur if its operating leases were owned and financed by debt. For periods prior to FY20, the add-back is approximated by using a multiple of 15% of total rent expense. For periods beginning on or after FY20, the add-back is approximated by multiplying average operating lease assets by 4%, which approximates the interest rate on the company’s operating lease liabilities.	
	(4)		Income taxes are approximated by 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 of 24.5% for the periods presented.	
	(5)		Operating lease amortization represents operating lease cost less operating lease interest. Operating lease cost includes short-term leases, which are immaterial, and excludes variable lease costs as these costs are not included in the operating lease asset balance.	
	(6)		Excess cash represents the amount of cash, cash equivalents and short-term investments greater than $1 billion, which approximates the amount of cash the company believes is necessary to run the business and may fluctuate over time.	
	(7)		Capitalized operating lease assets represent the estimated net assets that the company would record if the company's operating leases were owned. For periods prior to FY20, the asset is approximated by using a multiple of four times total rent expense. For periods beginning on or after FY20, capitalized operating lease assets are included within Total assets and therefore no adjustment is necessary.	
	(8)		Accumulated depreciation and amortization represents accumulated depreciation related to property and equipment and accumulated amortization related to definite-lived intangible assets.	
	(9)		Adjusted current liabilities represent total current liabilities less short-term debt and the current portions of operating lease liabilities and long-term debt.	
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