x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Minnesota
|
|
41-0907483
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State or other jurisdiction of
incorporation or organization
|
|
(I.R.S. Employer
Identification No.)
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7601 Penn Avenue South
Richfield, Minnesota
|
|
55423
(Zip Code)
|
(Address of principal executive offices)
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Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $.10 per share
|
|
New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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||
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|
•
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Computing and Mobile Phones
- computing and peripherals, e-readers, mobile phones (including related mobile network carrier commissions), networking, tablets and wearables (including smartwatches);
|
•
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Consumer Electronics
- digital imaging, health and fitness, home theater, portable audio (including headphones and portable speakers) and smart home;
|
•
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Appliances
- major appliances (including dishwashers, laundry, ovens and refrigerators) and small appliances (including blenders, coffee makers and vacuums);
|
•
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Entertainment
- drones, gaming hardware and software, movies, music, toys, virtual reality and other software;
|
•
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Services
- consultation, delivery, design, installation, memberships, protection plans, repair, set-up, technical support and GreatCall offerings; and
|
•
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Other
- beverages, snacks, sundry items and other product offerings within our International segment (including baby, luggage and sporting goods).
|
•
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increased labor expense to fulfill our customer promises, which may be higher than the related revenue;
|
•
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increased risk of errors or omissions in the fulfillment of services;
|
•
|
unpredictable extended warranty failure rates and related expenses;
|
•
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employees in transit using company vehicles to visit customer locations and employees being present in customer homes, which may increase our scope of liability;
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•
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the potential for increased scope of liability relating to managed services offerings;
|
•
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employees having access to customer devices, including the information held on those devices, which may increase our responsibility for the security of those devices and the data they hold;
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•
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the engagement of third parties to assist with some aspects of construction and installation, and the potential responsibility for the actions they withtake, and for compliance with building codes and related regulations; and
|
•
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increased risk of non-compliance with new laws and regulations applicable to these services.
|
•
|
the difficulty of complying with sometimes conflicting statutes and regulations in local, national or international jurisdictions;
|
•
|
the potential for unexpected costs related to compliance with new or existing environmental legislation or international agreements affecting energy, carbon emissions, electronics recycling and water or product materials;
|
•
|
ensuring compliance with applicable product compliance laws and regulations with respect to both the products we sell and contract to manufacture, including laws and regulations related to product safety and product transport;
|
•
|
the financial, operational and business impact of new regulations governing data privacy and security, such as the California Consumer Privacy Act ("CCPA"). When it goes into effect on January 1, 2020, the regulation will provide new consumer data privacy rights for California residents and will require companies to provide new disclosures to California consumers, allowing them to opt-out of certain uses of their personal information. However, legislators have stated that they intend to propose amendments to the CCPA, and it remains unclear what, if any, modifications will be made to the CCPA or how it will be interpreted. We cannot yet predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and incur incremental expenses in an effort to comply.
|
•
|
the impact of other new or changing statutes and regulations, including, but not limited to, financial reform; National Labor Relations Board rule changes; healthcare reform; corporate governance matters; escheatment rules; rules governing pricing, content, distribution, copyright, mobile communications, electronic device certification or payment
|
•
|
the impact of the potential implementation of more restrictive trade policies, higher tariffs or the renegotiation of existing trade agreements in the U.S. or countries where we sell our products and services or procure products;
|
•
|
the impact of potential changes in U.S. or other countries' tax laws and regulations or evolving interpretations of existing laws, including additional guidance and legislation related to the Tax Cuts and Jobs Act; and
|
•
|
the impact of litigation trends, including class action lawsuits involving consumers and shareholders, and labor and employment matters.
|
•
|
whether or not they make a purchase;
|
•
|
their choice of brand, model or price-point;
|
•
|
how frequently they upgrade or replace their devices; and
|
•
|
their appetite for complementary services (for example, protection plans).
|
•
|
different and incremental business risks of the new venture;
|
•
|
failure to motivate and retain key employees of the new venture;
|
•
|
uncertainty of forecasting financial performance;
|
•
|
failure to integrate aspects of the new venture into our existing business, such as new product or service offerings or information technology systems;
|
•
|
failure to maintain appropriate internal control over financial reporting;
|
•
|
failure to generate expected synergies, such as cost reductions;
|
•
|
unforeseen changes in the business environment of the new venture;
|
•
|
disputes or strategic differences with other third-party participants in the new venture; and
|
•
|
adverse impacts on relationships with vendors and other key partners of our existing business or the new venture.
|
•
|
interruptions to our delivery capabilities;
|
•
|
failure of third parties to meet our standards or commitments;
|
•
|
disruptions to our systems and the need to implement new systems;
|
•
|
limitations in capacity;
|
•
|
consolidation or business failures in the transportation and distribution sectors;
|
•
|
labor strikes or slow-downs impacting ports or any other aspect of our supply chain;
|
•
|
damages or other loss to products; and
|
•
|
increasing transportation costs.
|
•
|
natural disasters or extreme weather events;
|
•
|
diseases or epidemics that may affect our employees, customers or partners;
|
•
|
floods, fires or other catastrophes affecting our properties; or
|
•
|
terrorism, civil unrest or other conflicts.
|
•
|
the organization of unions and related regulations that affect the nature of labor relations, changes to which the National Labor Relations Board continually considers;
|
•
|
laws that impact the relationship between the company and independent contractors; and
|
•
|
laws that impact minimum wage, sick time, paid leave and scheduling requirements could directly or indirectly increase our payroll costs and/or impact the level of service we are able to provide.
|
•
|
changing patterns of customer consumption and behavior, particularly in light of an evolving multi-channel environment;
|
•
|
the location and appropriate number of stores in our portfolio;
|
•
|
the interior layout, format and size of our stores;
|
•
|
the products and services we offer at each store;
|
•
|
the local competitive positioning, trade area demographics and economic factors for each of our stores;
|
•
|
the primary term lease commitment and long-term lease option coverage for each store;
|
•
|
the occupancy cost of our stores relative to market rents; and
|
•
|
our supply chain service location network strategy.
|
•
|
closing stores and abandoning the related assets, while retaining the financial commitments of the leases;
|
•
|
incurring significant costs to remodel or transform our stores;
|
•
|
operating stores, supply chain or service locations that no longer meet the needs of our business; and
|
•
|
bearing excessive lease expenses.
|
•
|
we have greater exposure and responsibility to consumers for warranty replacements and repairs as a result of exclusive brand product defects, and our recourse to contract manufacturers for such warranty liabilities may be limited in foreign jurisdictions;
|
•
|
we may be subject to regulatory compliance and/or product liability claims relating to personal injury, death or property damage caused by exclusive brand products, some of which may require us to take significant actions, such as product recalls;
|
•
|
we may experience disruptions in manufacturing or logistics due to inconsistent and unanticipated order patterns, our inability to develop long-term relationships with key manufacturers or unforeseen natural disasters;
|
•
|
we may not be able to locate manufacturers that meet our internal standards, whether for new exclusive brand products or for migration of the manufacturing of products from an existing manufacturer;
|
•
|
we may be subject to a greater risk of inventory obsolescence as we do not generally have return to vendor rights;
|
•
|
we are subject to developing and often-changing labor and environmental laws for the manufacture of products in foreign countries, and we may be unable to conform to new rules or interpretations in a timely manner;
|
•
|
we may be subject to claims by technology or other intellectual property owners if we inadvertently infringe upon their patents or other intellectual property rights, or if we fail to pay royalties owed on our exclusive brand products;
|
•
|
our operations may be disrupted by trade disputes or excessive tariffs and we may not be able to source alternatives quickly enough to avoid interruptions in product supply;
|
•
|
we may be unable to obtain or adequately protect patents and other intellectual property rights on our exclusive brand products or manufacturing processes; and
|
•
|
regulations regarding disclosure of efforts to identify the country of origin of “conflict minerals” in certain portions of our supply chain could increase the cost of doing business and, depending on the findings of our country of origin inquiry, could have an adverse effect on our reputation.
|
•
|
political conditions and geopolitical events, including war and terrorism;
|
•
|
economic conditions, including monetary and fiscal policies and tax rules, as well as foreign exchange rate risk;
|
•
|
rules governing international trade and potential changes to trade policies or trade agreements and ownership of foreign entities;
|
•
|
cultural differences that we may be unable to anticipate or respond to appropriately;
|
•
|
different rules or practices regarding employee relations, including the existence of works councils or unions;
|
•
|
difficulties in enforcing intellectual property rights; and
|
•
|
difficulties encountered in exerting appropriate management oversight to operations in remote locations.
|
|
|
U.S. Best Buy
Stores |
|
U.S. Best Buy
Outlet Centers |
|
Pacific Sales
Stores |
|||
Alabama
|
|
12
|
|
|
—
|
|
|
—
|
|
Alaska
|
|
2
|
|
|
—
|
|
|
—
|
|
Arizona
|
|
22
|
|
|
—
|
|
|
—
|
|
Arkansas
|
|
8
|
|
|
—
|
|
|
—
|
|
California
|
|
116
|
|
|
2
|
|
|
21
|
|
Colorado
|
|
21
|
|
|
—
|
|
|
—
|
|
Connecticut
|
|
12
|
|
|
—
|
|
|
—
|
|
Delaware
|
|
3
|
|
|
—
|
|
|
—
|
|
District of Columbia
|
|
1
|
|
|
—
|
|
|
—
|
|
Florida
|
|
64
|
|
|
—
|
|
|
—
|
|
Georgia
|
|
28
|
|
|
—
|
|
|
—
|
|
Hawaii
|
|
2
|
|
|
—
|
|
|
—
|
|
Idaho
|
|
5
|
|
|
—
|
|
|
—
|
|
Illinois
|
|
43
|
|
|
1
|
|
|
—
|
|
Indiana
|
|
23
|
|
|
—
|
|
|
—
|
|
Iowa
|
|
11
|
|
|
—
|
|
|
—
|
|
Kansas
|
|
8
|
|
|
—
|
|
|
—
|
|
Kentucky
|
|
9
|
|
|
—
|
|
|
—
|
|
Louisiana
|
|
16
|
|
|
—
|
|
|
—
|
|
Maine
|
|
3
|
|
|
—
|
|
|
—
|
|
Maryland
|
|
21
|
|
|
—
|
|
|
—
|
|
Massachusetts
|
|
23
|
|
|
—
|
|
|
—
|
|
Michigan
|
|
32
|
|
|
—
|
|
|
—
|
|
Minnesota
|
|
19
|
|
|
—
|
|
|
—
|
|
Mississippi
|
|
8
|
|
|
—
|
|
|
—
|
|
Missouri
|
|
18
|
|
|
—
|
|
|
—
|
|
Montana
|
|
3
|
|
|
—
|
|
|
—
|
|
Nebraska
|
|
5
|
|
|
—
|
|
|
—
|
|
Nevada
|
|
10
|
|
|
—
|
|
|
—
|
|
New Hampshire
|
|
6
|
|
|
—
|
|
|
—
|
|
New Jersey
|
|
25
|
|
|
—
|
|
|
—
|
|
New Mexico
|
|
5
|
|
|
—
|
|
|
—
|
|
New York
|
|
52
|
|
|
—
|
|
|
—
|
|
North Carolina
|
|
32
|
|
|
1
|
|
|
—
|
|
North Dakota
|
|
4
|
|
|
—
|
|
|
—
|
|
Ohio
|
|
35
|
|
|
—
|
|
|
—
|
|
Oklahoma
|
|
13
|
|
|
—
|
|
|
—
|
|
Oregon
|
|
11
|
|
|
—
|
|
|
—
|
|
Pennsylvania
|
|
36
|
|
|
—
|
|
|
—
|
|
Puerto Rico
|
|
3
|
|
|
—
|
|
|
—
|
|
Rhode Island
|
|
1
|
|
|
—
|
|
|
—
|
|
South Carolina
|
|
13
|
|
|
—
|
|
|
—
|
|
South Dakota
|
|
2
|
|
|
—
|
|
|
—
|
|
Tennessee
|
|
16
|
|
|
—
|
|
|
—
|
|
Texas
|
|
103
|
|
|
2
|
|
|
—
|
|
Utah
|
|
11
|
|
|
—
|
|
|
—
|
|
Vermont
|
|
1
|
|
|
—
|
|
|
—
|
|
Virginia
|
|
34
|
|
|
—
|
|
|
—
|
|
Washington
|
|
19
|
|
|
1
|
|
|
—
|
|
West Virginia
|
|
5
|
|
|
—
|
|
|
—
|
|
Wisconsin
|
|
21
|
|
|
1
|
|
|
—
|
|
Wyoming
|
|
1
|
|
|
—
|
|
|
—
|
|
Total Domestic store count
|
|
997
|
|
|
8
|
|
|
21
|
|
|
|
|
|
|
|
|
|||
Square footage (in thousands)
|
|
38,658
|
|
|
271
|
|
|
571
|
|
Average square feet per store (in thousands)
|
|
39
|
|
|
34
|
|
|
27
|
|
|
|
U.S. Best Buy
Stores |
|
U.S. Best Buy
Outlet Centers |
|
Pacific Sales
Stores |
|||
Owned store locations
|
|
25
|
|
|
—
|
|
|
—
|
|
Owned buildings and leased land
|
|
35
|
|
|
—
|
|
|
—
|
|
Leased store locations
|
|
937
|
|
|
8
|
|
|
21
|
|
|
|
|
|
Square Footage (in thousands)
|
||||
|
|
Location
|
|
Leased
|
|
Owned
|
||
Distribution centers
|
|
23 locations in 17 states
|
|
9,503
|
|
|
3,168
|
|
Geek Squad service center
(1)
|
|
Louisville, Kentucky
|
|
237
|
|
|
—
|
|
Principal corporate headquarters
(2)
|
|
Richfield, Minnesota
|
|
—
|
|
|
1,452
|
|
Territory field offices
|
|
11 locations throughout the U.S.
|
|
87
|
|
|
—
|
|
GreatCall care centers and corporate office space
|
|
3 locations in 2 states
|
|
136
|
|
|
—
|
|
Pacific Sales corporate office space
|
|
Torrance, California
|
|
16
|
|
|
—
|
|
(1)
|
The leased space utilized by our Geek Squad operations is used primarily to service notebook and desktop computers.
|
(2)
|
Our principal corporate headquarters consists of four interconnected buildings. Certain vendors who provide us with a variety of corporate services occupy a portion of our principal corporate headquarters. We also sublease a portion of the office space to unaffiliated third parties.
|
|
Best Buy
Stores |
|
Best Buy
Mobile Stores |
|
Best Buy
Express Stores |
|||
Canada
|
|
|
|
|
|
|||
Alberta
|
18
|
|
|
8
|
|
|
—
|
|
British Columbia
|
22
|
|
|
8
|
|
|
—
|
|
Manitoba
|
4
|
|
|
—
|
|
|
—
|
|
New Brunswick
|
3
|
|
|
—
|
|
|
—
|
|
Newfoundland
|
1
|
|
|
—
|
|
|
—
|
|
Nova Scotia
|
3
|
|
|
1
|
|
|
—
|
|
Ontario
|
54
|
|
|
23
|
|
|
—
|
|
Prince Edward Island
|
1
|
|
|
—
|
|
|
—
|
|
Quebec
|
22
|
|
|
5
|
|
|
—
|
|
Saskatchewan
|
4
|
|
|
—
|
|
|
—
|
|
Total Canada store count
|
132
|
|
|
45
|
|
|
—
|
|
|
|
|
|
|
|
|||
Square footage (in thousands)
|
3,743
|
|
|
42
|
|
|
—
|
|
Average square feet per store (in thousands)
|
28
|
|
|
1
|
|
|
—
|
|
|
Best Buy
Stores |
|
Best Buy
Mobile Stores |
|
Best Buy
Express Stores |
|||
Mexico
|
|
|
|
|
|
|||
Chihuahua
|
1
|
|
|
—
|
|
|
—
|
|
Ciudad de México
|
8
|
|
|
—
|
|
|
4
|
|
Coahuila
|
—
|
|
|
—
|
|
|
1
|
|
Estado de México
|
3
|
|
|
—
|
|
|
—
|
|
Guanajuato
|
1
|
|
|
—
|
|
|
—
|
|
Jalisco
|
4
|
|
|
—
|
|
|
—
|
|
Michoacan
|
1
|
|
|
—
|
|
|
—
|
|
Morelos
|
1
|
|
|
—
|
|
|
—
|
|
Nuevo León
|
3
|
|
|
—
|
|
|
1
|
|
Paseo Interlomas
|
1
|
|
|
—
|
|
|
—
|
|
Puebla
|
1
|
|
|
—
|
|
|
—
|
|
Queretaro
|
1
|
|
|
—
|
|
|
—
|
|
Quintana Roo
|
1
|
|
|
—
|
|
|
—
|
|
San Luis Potosí
|
1
|
|
|
—
|
|
|
—
|
|
Veracruz
|
1
|
|
|
—
|
|
|
—
|
|
Yucatan
|
1
|
|
|
—
|
|
|
—
|
|
Total Mexico store count
|
29
|
|
|
—
|
|
|
6
|
|
|
|
|
|
|
|
|||
Square footage (in thousands)
|
810
|
|
|
—
|
|
|
12
|
|
Average square feet per store (in thousands)
|
28
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
|
|||
Total International store count
|
161
|
|
|
45
|
|
|
6
|
|
|
Canada
|
|
Mexico
|
||||||||
|
Best Buy
Stores |
|
Best Buy
Mobile Stores |
|
Best Buy
Stores |
|
Best Buy Express Stores
|
||||
Owned store locations
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Leased store locations
|
129
|
|
|
45
|
|
|
29
|
|
|
6
|
|
|
|
|
Square Footage (in thousands)
|
|
|
|
Square Footage (in thousands)
|
||||||||
|
Distribution Centers
|
|
Leased
|
|
Owned
|
|
Principal Corporate Offices
|
|
Leased
|
|
Owned
|
||||
Canada
|
Brampton, Ontario
|
|
1,057
|
|
|
—
|
|
|
Burnaby, British Columbia
|
|
141
|
|
|
—
|
|
|
Vancouver, British Columbia
|
|
439
|
|
|
—
|
|
|
|
|
|
|
|
||
Mexico
|
Estado de Mexico, Mexico
|
|
89
|
|
|
—
|
|
|
Distrito Federal, Mexico
|
|
32
|
|
|
—
|
|
Name
|
|
Age
|
|
Position with the Company
|
|
Years
with the
Company
|
Hubert Joly
|
|
59
|
|
Chairman and Chief Executive Officer
|
|
6
|
Corie Barry
|
|
44
|
|
Chief Financial Officer & Strategic Transformation Officer
|
|
19
|
Kamy Scarlett
|
|
55
|
|
Chief Human Resources Officer & President, U.S. Retail Stores
|
|
5
|
R. Michael (Mike) Mohan
|
|
51
|
|
Chief Operating Officer, Best Buy U.S.
|
|
15
|
Keith J. Nelsen
|
|
55
|
|
General Counsel and Secretary
|
|
13
|
Brian Tilzer
|
|
48
|
|
Chief Digital and Technology Officer
|
|
1
|
Mathew R. Watson
|
|
48
|
|
Senior Vice President, Controller and Chief Accounting Officer
|
|
13
|
Fiscal Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(1)
|
||||||
Nov. 4, 2018 through Dec. 1, 2018
|
2,222,495
|
|
|
$
|
65.88
|
|
|
2,222,495
|
|
|
$
|
1,739,000,000
|
|
Dec. 2, 2018 through Jan. 5, 2019
|
2,393,284
|
|
|
$
|
56.10
|
|
|
2,393,284
|
|
|
$
|
1,604,000,000
|
|
Jan. 6, 2019 through Feb. 2, 2019
|
1,184,372
|
|
|
$
|
57.43
|
|
|
1,184,372
|
|
|
$
|
1,536,000,000
|
|
Total fiscal 2019 fourth quarter
|
5,800,151
|
|
|
$
|
60.12
|
|
|
5,800,151
|
|
|
$
|
1,536,000,000
|
|
(1)
|
At the beginning of the fourth quarter of fiscal 2019, there was $1.9 billion available for share repurchases under our February 2017 $5.0 billion share repurchase program. The "Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program" column reflects the $349 million we purchased in the fourth quarter of fiscal 2019 pursuant to such program. For additional information, see Note 7,
Shareholders' Equity
, of the Notes to the Consolidated Financial Statements included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K.
|
Fiscal Years Ended
|
February 1, 2014
|
|
January 31, 2015
|
|
January 30, 2016
|
|
January 28, 2017
|
|
February 3, 2018
|
|
February 2, 2019
|
||||||||||||
Best Buy Co., Inc.
|
$
|
100.00
|
|
|
$
|
153.08
|
|
|
$
|
126.20
|
|
|
$
|
205.59
|
|
|
$
|
345.38
|
|
|
$
|
290.98
|
|
S&P 500
|
100.00
|
|
|
114.22
|
|
|
113.46
|
|
|
136.20
|
|
|
172.17
|
|
|
168.19
|
|
||||||
S&P Retailing Group
|
100.00
|
|
|
119.10
|
|
|
140.73
|
|
|
167.11
|
|
|
241.08
|
|
|
256.26
|
|
Fiscal Year
|
2019
(1)
|
|
2018
(2)(3)
|
|
2017
(4)
|
|
2016
(5)
|
|
2015
(6)
|
||||||||||
Consolidated Statements of Earnings Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
42,879
|
|
|
$
|
42,151
|
|
|
$
|
39,403
|
|
|
$
|
39,528
|
|
|
$
|
40,339
|
|
Operating income
|
1,900
|
|
|
1,843
|
|
|
1,854
|
|
|
1,375
|
|
|
1,450
|
|
|||||
Net earnings from continuing operations
|
1,464
|
|
|
999
|
|
|
1,207
|
|
|
807
|
|
|
1,246
|
|
|||||
Gain (loss) from discontinued operations
|
—
|
|
|
1
|
|
|
21
|
|
|
90
|
|
|
(11
|
)
|
|||||
Net earnings including noncontrolling interests
|
1,464
|
|
|
1,000
|
|
|
1,228
|
|
|
897
|
|
|
1,235
|
|
|||||
Net earnings attributable to Best Buy Co.,
Inc. shareholders
|
1,464
|
|
|
1,000
|
|
|
1,228
|
|
|
897
|
|
|
1,233
|
|
|||||
Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings from continuing operations
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.74
|
|
|
$
|
2.30
|
|
|
$
|
3.53
|
|
Net gain (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.07
|
|
|
0.26
|
|
|
(0.04
|
)
|
|||||
Net earnings
|
5.20
|
|
|
3.26
|
|
|
3.81
|
|
|
2.56
|
|
|
3.49
|
|
|||||
Cash dividends declared and paid
|
1.80
|
|
|
1.36
|
|
|
1.57
|
|
|
1.43
|
|
|
0.72
|
|
|||||
Operating Statistics
|
|
|
|
|
|
|
|
|
|
||||||||||
Comparable sales growth
(7)
|
4.8
|
%
|
|
5.6
|
%
|
|
0.3
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|||||
Gross profit rate
|
23.2
|
%
|
|
23.4
|
%
|
|
24.0
|
%
|
|
23.3
|
%
|
|
22.4
|
%
|
|||||
Selling, general and administrative expenses rate
|
18.7
|
%
|
|
19.0
|
%
|
|
19.2
|
%
|
|
19.3
|
%
|
|
18.8
|
%
|
|||||
Operating income rate
|
4.4
|
%
|
|
4.4
|
%
|
|
4.7
|
%
|
|
3.5
|
%
|
|
3.6
|
%
|
|||||
Year-End Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Current ratio
(8)
|
1.2
|
|
|
1.3
|
|
|
1.5
|
|
|
1.4
|
|
|
1.5
|
|
|||||
Total assets
|
$
|
12,901
|
|
|
$
|
13,049
|
|
|
$
|
13,856
|
|
|
$
|
13,519
|
|
|
$
|
15,245
|
|
Debt, including current portion
|
1,388
|
|
|
1,355
|
|
|
1,365
|
|
|
1,734
|
|
|
1,613
|
|
|||||
Total equity
|
3,306
|
|
|
3,612
|
|
|
4,709
|
|
|
4,378
|
|
|
5,000
|
|
|||||
Number of stores
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
(9)
|
1,026
|
|
|
1,298
|
|
|
1,369
|
|
|
1,416
|
|
|
1,449
|
|
|||||
International
|
212
|
|
|
216
|
|
|
212
|
|
|
216
|
|
|
283
|
|
|||||
Total
|
1,238
|
|
|
1,514
|
|
|
1,581
|
|
|
1,632
|
|
|
1,732
|
|
|||||
Retail square footage (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
(9)
|
39,500
|
|
|
40,360
|
|
|
41,039
|
|
|
41,234
|
|
|
41,734
|
|
|||||
International
|
4,607
|
|
|
4,602
|
|
|
4,511
|
|
|
4,543
|
|
|
6,470
|
|
|||||
Total
|
44,107
|
|
|
44,962
|
|
|
45,550
|
|
|
45,777
|
|
|
48,204
|
|
(1)
|
Included within operating income, net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2019 is $46 million ($35 million net of taxes) of restructuring charges from continuing operations related to measures we took to restructure our business; $35 million ($28 million net of taxes) of charges associated with the acquisition of GreatCall, including acquisition-related transaction costs and the non-cash amortization of definite-lived intangible assets; and $7 million ($5 million net of taxes) related to a one-time bonus for certain employees in response to future tax savings created by the Tax Cuts and Jobs Act ("tax reform" or "Tax Act") enacted into law in fiscal 2018. Also included in net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2019 is $25 million of subsequent adjustments resulting from the Tax Act. Refer to Note 9,
Restructuring Charges
, Note 2,
Acquisition
, and Note 11,
Income Taxes
, in the Notes to the Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K.
|
(2)
|
Fiscal 2018 included 53 weeks. All other periods presented included 52 weeks.
|
(3)
|
Included within operating income, net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2018 is $80 million ($51 million net of taxes) related to a one-time bonus for certain employees and $20 million ($13 million net of taxes) related to a one-time contribution to the Best Buy Foundation in response to future tax savings created by the Tax Act. Also included in net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2018 is $283 million of charges resulting from the Tax Act. Refer to Note 11,
Income Taxes
, in the Notes to the Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K.
|
(4)
|
Included within net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2017 includes $161 million ($100 million net of taxes) due to cathode ray tube ("CRT") and LCD litigation settlements reached, net of related legal fees and costs. Settlements relate to products purchased and sold in prior fiscal years.
|
(5)
|
Included within operating income and net earnings from continuing operations for fiscal 2016 is $201 million ($159 million net of taxes) of restructuring charges from continuing operations recorded in fiscal 2016 related to measures we took to restructure our business. Net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2016 includes restructuring charges (net of tax and noncontrolling interest) from continuing operations.
|
(6)
|
Included within net earnings from continuing operations and net earnings attributable to Best Buy Co., Inc. shareholders for fiscal 2015 includes $353 million due to a discrete benefit related to reorganizing certain European legal entities.
|
(7)
|
Our comparable sales calculation compares revenue from stores, websites and call centers operating for at least 14 full months, as well as revenue related to certain other comparable sales channels for a particular period to the corresponding period in the prior year. Relocated stores, as well as remodeled, expanded and downsized stores closed more than 14 days, are excluded from the comparable sales calculation until at least 14 full months after reopening. Acquisitions are included in the comparable sales calculation beginning with the first full quarter following the first anniversary of the date of the acquisition. The Canadian brand consolidation, which included the permanent closure of 66 Future Shop stores, the conversion of 65 Future Shop stores to Best Buy stores and the elimination of the Future Shop website, had a material impact on a year-over-year basis on the remaining Canadian retail stores and the website. As such, from the first quarter of fiscal 2016 through the third quarter of fiscal 2017, all Canadian store and website revenue was removed from the comparable sales base and the International segment no longer had a comparable metric. Therefore, Consolidated comparable sales equaled the Domestic segment comparable sales. Beginning in the fourth quarter of fiscal 2017, we resumed reporting International comparable sales as revenue and the International segment was once again deemed to be comparable and, as such, Consolidated comparable sales are once again equal to the aggregation of Domestic and International comparable sales. Comparable sales also exclude the impact of the extra week in fiscal 2018. On March 1, 2018, we announced our intent to close all of our 257 remaining Best Buy Mobile stand-alone stores in the U.S. As a result, all revenue related to these stores has been excluded from the comparable sales calculation beginning in March 2018. On October 1, 2018, we acquired all outstanding shares of GreatCall. Consistent with our comparable sales policy, the results of GreatCall are excluded from our comparable sales calculation for fiscal 2019.
|
(8)
|
The current ratio is calculated by dividing total current assets by total current liabilities.
|
(9)
|
Includes Best Buy Outlet Centers for all fiscal years presented.
|
•
|
Overview
|
•
|
Business Strategy
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Estimates
|
•
|
New Accounting Pronouncements
|
Consolidated Performance Summary
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
42,879
|
|
|
$
|
42,151
|
|
|
$
|
39,403
|
|
Revenue % increase (decrease)
|
1.7
|
%
|
|
7.0
|
%
|
|
(0.3
|
)%
|
|||
Comparable sales growth
(1)
|
4.8
|
%
|
|
5.6
|
%
|
|
0.3
|
%
|
|||
Gross profit
|
$
|
9,961
|
|
|
$
|
9,876
|
|
|
$
|
9,440
|
|
Gross profit as a % of revenue
(2)
|
23.2
|
%
|
|
23.4
|
%
|
|
24.0
|
%
|
|||
SG&A
|
$
|
8,015
|
|
|
$
|
8,023
|
|
|
$
|
7,547
|
|
SG&A as a % of revenue
|
18.7
|
%
|
|
19.0
|
%
|
|
19.2
|
%
|
|||
Restructuring charges
|
$
|
46
|
|
|
$
|
10
|
|
|
$
|
39
|
|
Operating income
|
$
|
1,900
|
|
|
$
|
1,843
|
|
|
$
|
1,854
|
|
Operating income as a % of revenue
|
4.4
|
%
|
|
4.4
|
%
|
|
4.7
|
%
|
|||
Net earnings from continuing operations
|
$
|
1,464
|
|
|
$
|
999
|
|
|
$
|
1,207
|
|
Gain from discontinued operations
(3)
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
21
|
|
Net earnings
|
$
|
1,464
|
|
|
$
|
1,000
|
|
|
$
|
1,228
|
|
Diluted earnings per share from continuing operations
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.74
|
|
Diluted earnings per share
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.81
|
|
(1)
|
The Canadian brand consolidation, which included the permanent closure of 66 Future Shop stores, the conversion of 65 Future Shop stores to Best Buy stores and the elimination of the Future Shop website, had a material impact on a year-over-year basis on the remaining Canadian retail stores and the website. As such, beginning in the first quarter of fiscal 2016 through the third quarter of fiscal 2017, all store and website revenue was removed from the comparable sales base, and an International segment (comprised of Canada and Mexico) comparable sales metric for the full year was not provided. Beginning in the fourth quarter of fiscal 2017, we resumed reporting International comparable sales as revenue in the International segment was once again determined to be comparable. Comparable sales also exclude the impact of the extra week in fiscal 2018. Comparable sales also exclude the impact of the extra week in fiscal 2018. On March 1, 2018, we announced our intent to close all of our 257 remaining Best Buy Mobile stand-alone stores in the U.S. As a result, all revenue related to these stores has been excluded from the comparable sales calculation beginning in March 2018. On October 1, 2018, we acquired all outstanding shares of GreatCall. Consistent with our comparable sales policy, the results of GreatCall are excluded from our comparable sales calculation for fiscal 2019.
|
(2)
|
Because retailers vary in how they record costs of operating their supply chain between cost of goods sold and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers' corresponding rates. For additional information regarding costs classified in cost of goods sold and SG&A, refer to Note 1,
Summary of Significant Accounting Policies
, of the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K.
|
(3)
|
Includes both gain from discontinued operations and net earnings from discontinued operations.
|
Comparable sales impact
|
4.4
|
%
|
Non-comparable sales impact
(1)
|
(2.5
|
)%
|
Impact of foreign currency exchange rate fluctuations
|
(0.2
|
)%
|
Total revenue increase
|
1.7
|
%
|
(1)
|
Non-comparable sales reflect the impact of the extra week in fiscal 2018, the impact of net store opening and closing activity, the results of GreatCall, as well as the impact of revenue streams not included within our comparable sales calculation, such as profit-share revenue, certain credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable.
|
Comparable sales impact
|
5.3
|
%
|
Non-comparable sales impact
(1)
|
1.5
|
%
|
Impact of foreign currency exchange rate fluctuations
|
0.2
|
%
|
Total revenue increase
|
7.0
|
%
|
(1)
|
Non-comparable sales reflect the impact of net store opening and closing activity, the impact of the extra week in fiscal 2018, as well as the impact of revenue streams not included within our comparable sales calculation, such as profit-share revenue, certain credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable.
|
Domestic Segment Performance Summary
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
39,304
|
|
|
$
|
38,662
|
|
|
$
|
36,248
|
|
Revenue % increase (decrease)
|
1.7
|
%
|
|
6.7
|
%
|
|
(0.3
|
)%
|
|||
Comparable sales growth
(1)
|
4.8
|
%
|
|
5.6
|
%
|
|
0.2
|
%
|
|||
Gross profit
|
$
|
9,144
|
|
|
$
|
9,065
|
|
|
$
|
8,650
|
|
Gross profit as % of revenue
|
23.3
|
%
|
|
23.4
|
%
|
|
23.9
|
%
|
|||
SG&A
|
$
|
7,300
|
|
|
$
|
7,304
|
|
|
$
|
6,855
|
|
SG&A as % of revenue
|
18.6
|
%
|
|
18.9
|
%
|
|
18.9
|
%
|
|||
Restructuring charges
|
$
|
47
|
|
|
$
|
9
|
|
|
$
|
31
|
|
Operating income
|
$
|
1,797
|
|
|
$
|
1,752
|
|
|
$
|
1,764
|
|
Operating income as % of revenue
|
4.6
|
%
|
|
4.5
|
%
|
|
4.9
|
%
|
|||
|
|
|
|
|
|
||||||
Selected Online Revenue Data
|
|
|
|
|
|
||||||
Total online revenue
|
$
|
6,528
|
|
|
$
|
5,991
|
|
|
$
|
4,843
|
|
Online revenue as a % of total segment revenue
|
16.6
|
%
|
|
15.5
|
%
|
|
13.4
|
%
|
|||
Comparable online sales growth
(1)
|
10.5
|
%
|
|
21.8
|
%
|
|
20.8
|
%
|
(1)
|
Comparable online sales are included in the comparable sales calculation. Comparable sales also exclude the impact of the extra week in fiscal 2018.
|
|
Fiscal 2017
|
|
Fiscal 2018
|
|
Fiscal 2019
|
|||||||||||||||
|
Total Stores
at End of
Fiscal Year
|
|
Stores
Opened
|
|
Stores
Closed
|
|
Total Stores
at End of
Fiscal Year
|
|
Stores
Opened
|
|
Stores
Closed
|
|
Total Stores
at End of
Fiscal Year
|
|||||||
Best Buy
|
1,026
|
|
|
—
|
|
|
(18
|
)
|
|
1,008
|
|
|
1
|
|
|
(12
|
)
|
|
997
|
|
Best Buy Mobile stand-alone
|
309
|
|
|
—
|
|
|
(52
|
)
|
|
257
|
|
|
—
|
|
|
(257
|
)
|
|
—
|
|
Outlet centers
|
6
|
|
|
—
|
|
|
(1
|
)
|
|
5
|
|
|
3
|
|
|
—
|
|
|
8
|
|
Pacific Sales
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
(7
|
)
|
|
21
|
|
Total Domestic segment stores
|
1,369
|
|
|
—
|
|
|
(71
|
)
|
|
1,298
|
|
|
4
|
|
|
(276
|
)
|
|
1,026
|
|
Comparable sales impact
|
4.4
|
%
|
Non-comparable sales impact
(1)
|
(2.7
|
)%
|
Total revenue increase
|
1.7
|
%
|
(1)
|
Non-comparable sales reflect the impact of the extra week in fiscal 2018, the results of GreatCall, as well as the impact of revenue streams not included within our comparable sales calculation, such as profit-share revenue, certain credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable. Non-comparable sales also reflect the impact of net store opening and closing activity of (1.3)% in fiscal 2019.
|
|
Revenue Mix Summary
|
|
Comparable Sales Summary
|
||||||||
|
Year Ended
|
|
Year Ended
|
||||||||
|
February 2, 2019
|
|
February 3, 2018
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Computing and Mobile Phones
|
44
|
%
|
|
45
|
%
|
|
4.2
|
%
|
|
5.3
|
%
|
Consumer Electronics
|
33
|
%
|
|
33
|
%
|
|
3.9
|
%
|
|
3.1
|
%
|
Appliances
|
10
|
%
|
|
10
|
%
|
|
9.9
|
%
|
|
11.4
|
%
|
Entertainment
|
8
|
%
|
|
8
|
%
|
|
4.7
|
%
|
|
12.6
|
%
|
Services
|
5
|
%
|
|
4
|
%
|
|
7.7
|
%
|
|
4.0
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
4.8
|
%
|
|
5.6
|
%
|
•
|
Computing and Mobile Phones:
The
4.2%
comparable sales growth was driven primarily by wearables, mobile phones and computing.
|
•
|
Consumer Electronics:
The
3.9%
comparable sales growth was driven primarily by smart home, home theater and headphones, partially offset by digital imaging.
|
•
|
Appliances:
The
9.9%
comparable sales growth was driven by both large and small appliances.
|
•
|
Entertainment:
The
4.7%
comparable sales growth was driven primarily by gaming, partially offset by virtual reality.
|
•
|
Services:
The
7.7%
comparable sales growth was primarily driven by our support business.
|
Comparable sales impact
|
5.3
|
%
|
Non-comparable sales impact
(1)
|
1.4
|
%
|
Total revenue increase
|
6.7
|
%
|
(1)
|
Non-comparable sales reflect the impact of the extra week in fiscal 2018, as well as the impact of revenue streams not included within our comparable sales calculation, such as profit-share revenue, certain credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable. Non-comparable sales also reflect the impact of net store opening and closing activity of (0.7)% in fiscal 2018.
|
|
Revenue Mix Summary
|
|
Comparable Sales Summary
|
||||||||
|
Year Ended
|
|
Year Ended
|
||||||||
|
February 3, 2018
|
|
January 28, 2017
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
Computing and Mobile Phones
|
45
|
%
|
|
45
|
%
|
|
5.3
|
%
|
|
(1.8
|
)%
|
Consumer Electronics
|
33
|
%
|
|
34
|
%
|
|
3.1
|
%
|
|
5.0
|
%
|
Appliances
|
10
|
%
|
|
9
|
%
|
|
11.4
|
%
|
|
7.8
|
%
|
Entertainment
|
8
|
%
|
|
7
|
%
|
|
12.6
|
%
|
|
(13.8
|
)%
|
Services
|
4
|
%
|
|
5
|
%
|
|
4.0
|
%
|
|
(3.3
|
)%
|
Total
|
100
|
%
|
|
100
|
%
|
|
5.6
|
%
|
|
0.2
|
%
|
•
|
Computing and Mobile Phones:
The
5.3%
comparable sales growth was driven primarily by computing, mobile phones and wearables, partially offset by tablets.
|
•
|
Consumer Electronics:
The
3.1%
comparable sales growth was driven primarily by smart home, home theater, headphones and voice assistants, partially offset by health and fitness.
|
•
|
Appliances:
The
11.4%
comparable sales growth was driven primarily by large and small appliances.
|
•
|
Entertainment:
The
12.6%
comparable sales growth was driven primarily by gaming hardware.
|
•
|
Services:
The
4.0%
comparable sales growth was primarily driven by continued growth in our warranty business, and higher installation and delivery services.
|
International Segment Performance Summary
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
3,575
|
|
|
$
|
3,489
|
|
|
$
|
3,155
|
|
Revenue increase (decrease) %
|
2.5
|
%
|
|
10.6
|
%
|
|
(0.3
|
)%
|
|||
Comparable sales growth
(1)
|
4.6
|
%
|
|
6.3
|
%
|
|
n/a
|
|
|||
Gross profit
|
$
|
817
|
|
|
$
|
811
|
|
|
$
|
790
|
|
Gross profit as % of revenue
|
22.9
|
%
|
|
23.2
|
%
|
|
25.0
|
%
|
|||
SG&A
|
$
|
715
|
|
|
$
|
719
|
|
|
$
|
692
|
|
SG&A as % of revenue
|
20.0
|
%
|
|
20.6
|
%
|
|
21.9
|
%
|
|||
Restructuring (benefit) charges
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
8
|
|
Operating income
|
$
|
103
|
|
|
$
|
91
|
|
|
$
|
90
|
|
Operating income as % of revenue
|
2.9
|
%
|
|
2.6
|
%
|
|
2.9
|
%
|
(1)
|
The Canadian brand consolidation, which included the permanent closure of 66 Future Shop stores, the conversion of 65 Future Shop stores to Best Buy stores and the elimination of the Future Shop website, had a material impact on a year-over-year basis on the remaining Canadian retail stores and the website. As such, beginning in the first quarter of fiscal 2016 through the third quarter of fiscal 2017, all store and website revenue was removed from the comparable sales base, and an International segment (comprised of Canada and Mexico) comparable sales metric for the full year was not provided. Beginning in the fourth quarter of fiscal 2017, we resumed reporting International comparable sales as revenue in the International segment was once again determined to be comparable. Comparable sales also exclude the impact of the extra week in fiscal 2018.
|
|
Fiscal 2017
|
|
Fiscal 2018
|
|
Fiscal 2019
|
|||||||||||||||
|
Total Stores
at End of Fiscal Year |
|
Stores
Opened |
|
Stores
Closed |
|
Total Stores
at End of Fiscal Year |
|
Stores
Opened |
|
Stores
Closed |
|
Total Stores
at End of Fiscal Year |
|||||||
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Best Buy
|
134
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
(2
|
)
|
|
132
|
|
Best Buy Mobile
|
53
|
|
|
—
|
|
|
(2
|
)
|
|
51
|
|
|
—
|
|
|
(6
|
)
|
|
45
|
|
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Best Buy
|
20
|
|
|
5
|
|
|
—
|
|
|
25
|
|
|
4
|
|
|
—
|
|
|
29
|
|
Express
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Total International segment stores
|
212
|
|
|
6
|
|
|
(2
|
)
|
|
216
|
|
|
4
|
|
|
(8
|
)
|
|
212
|
|
Comparable sales impact
|
4.4
|
%
|
Impact of foreign currency exchange rate fluctuations
|
(1.9
|
)%
|
Total revenue increase
|
2.5
|
%
|
|
Revenue Mix Summary
|
|
Comparable Sales Summary
|
||||||||
|
Year Ended
|
|
Year Ended
|
||||||||
|
February 2, 2019
|
|
February 3, 2018
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Computing and Mobile Phones
|
46
|
%
|
|
46
|
%
|
|
2.7
|
%
|
|
2.0
|
%
|
Consumer Electronics
|
31
|
%
|
|
32
|
%
|
|
2.0
|
%
|
|
7.1
|
%
|
Appliances
|
9
|
%
|
|
8
|
%
|
|
20.5
|
%
|
|
41.3
|
%
|
Entertainment
|
7
|
%
|
|
7
|
%
|
|
1.6
|
%
|
|
9.3
|
%
|
Services
|
5
|
%
|
|
5
|
%
|
|
10.3
|
%
|
|
(5.1
|
)%
|
Other
|
2
|
%
|
|
2
|
%
|
|
30.3
|
%
|
|
15.4
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
4.6
|
%
|
|
6.3
|
%
|
•
|
Computing and Mobile Phones:
The
2.7%
comparable sales growth was driven primarily by mobile phones and wearables, partially offset by tablets.
|
•
|
Consumer Electronics:
The
2.0%
comparable sales growth was driven primarily by headphones and smart home, partially offset by digital imaging and home theater.
|
•
|
Appliances:
The
20.5%
comparable sales growth was driven by both large and small appliances.
|
•
|
Entertainment:
The
1.6%
comparable sales growth was driven primarily by gaming, partially offset by movies and drones.
|
•
|
Services:
The
10.3%
comparable sales growth was driven primarily by repair.
|
•
|
Other:
The
30.3%
comparable sales growth was driven primarily by baby.
|
Comparable sales impact
|
6.1
|
%
|
Impact of foreign currency exchange rate fluctuations
|
2.7
|
%
|
Non-comparable sales impact
(1)
|
1.8
|
%
|
Total revenue increase
|
10.6
|
%
|
(1)
|
Non-comparable sales reflect the impact of net store opening and closing activity, including the Canadian brand consolidation activity in the first three quarters of fiscal 2017, the impact of the extra week in fiscal 2018, as well as the impact of revenue streams not included within our comparable sales calculation, such as certain credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable.
|
|
Revenue Mix Summary
|
|
Comparable Sales Summary
|
|||||||
|
Year Ended
|
|
Year Ended
|
|||||||
|
February 3, 2018
|
|
January 28, 2017
|
|
February 3, 2018
|
|
January 28, 2017
|
|||
Computing and Mobile Phones
|
46
|
%
|
|
48
|
%
|
|
2.0
|
%
|
|
n/a
|
Consumer Electronics
|
32
|
%
|
|
31
|
%
|
|
7.1
|
%
|
|
n/a
|
Appliances
|
8
|
%
|
|
6
|
%
|
|
41.3
|
%
|
|
n/a
|
Entertainment
|
7
|
%
|
|
7
|
%
|
|
9.3
|
%
|
|
n/a
|
Services
|
5
|
%
|
|
7
|
%
|
|
(5.1
|
)%
|
|
n/a
|
Other
|
2
|
%
|
|
1
|
%
|
|
15.4
|
%
|
|
n/a
|
Total
|
100
|
%
|
|
100
|
%
|
|
6.3
|
%
|
|
n/a
|
•
|
Computing and Mobile Phones:
The 2.0% comparable sales growth was driven primarily by computing, mobile phones and wearables, partially offset by tablets.
|
•
|
Consumer Electronics:
The 7.1% comparable sales growth was driven primarily by smart home, home theater, headphones and voice assistants, partially offset by digital imaging and health and fitness.
|
•
|
Appliances:
The 41.3% comparable sales growth was driven primarily by large and small appliances due to the addition of an appliance department within all of our stores in Canada.
|
•
|
Entertainment:
The 9.3% comparable sales growth was driven primarily by gaming hardware.
|
•
|
Services:
The 5.1% comparable sales decline was driven primarily by technical support and repair, partially offset by installation.
|
•
|
Other:
The 15.4% comparable sales growth was driven primarily by other product offerings, including baby and sporting goods.
|
|
Fiscal Year
|
||||||||||
|
2019
|
|
2018
|
|
2017
(1)
|
||||||
Operating income
|
$
|
1,900
|
|
|
$
|
1,843
|
|
|
$
|
1,854
|
|
Restructuring charges
(2)
|
46
|
|
|
10
|
|
|
39
|
|
|||
Intangible asset amortization
(3)
|
22
|
|
|
—
|
|
|
—
|
|
|||
Acquisition-related transaction costs
(3)
|
13
|
|
|
—
|
|
|
—
|
|
|||
Tax reform-related item - employee bonus
(4)
|
7
|
|
|
80
|
|
|
—
|
|
|||
Tax reform-related item - charitable contribution
(4)
|
—
|
|
|
20
|
|
|
—
|
|
|||
Net CRT/LCD settlements
(5)
|
—
|
|
|
—
|
|
|
(161
|
)
|
|||
Other Canada brand consolidation charges - SG&A
(6)
|
—
|
|
|
—
|
|
|
1
|
|
|||
Non-GAAP operating income
|
$
|
1,988
|
|
|
$
|
1,953
|
|
|
$
|
1,733
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
22.4
|
%
|
|
45.0
|
%
|
|
33.5
|
%
|
|||
Restructuring charges
(2)
|
(0.1
|
)%
|
|
—
|
%
|
|
0.1
|
%
|
|||
Tax reform - repatriation tax
(4)
|
1.1
|
%
|
|
(11.5
|
)%
|
|
—
|
%
|
|||
Tax reform - deferred tax rate change
(4)
|
0.3
|
%
|
|
(4.1
|
)%
|
|
—
|
%
|
|||
Tax reform-related item - employee bonus
(4)
|
—
|
%
|
|
0.3
|
%
|
|
—
|
%
|
|||
Tax reform-related item - charitable contribution
(4)
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Net CRT/LCD settlements
(5)
|
—
|
%
|
|
—
|
%
|
|
(0.5
|
)%
|
|||
Non-GAAP effective tax rate
|
23.7
|
%
|
|
29.8
|
%
|
|
33.1
|
%
|
|||
|
|
|
|
|
|
||||||
Diluted earnings per share from continuing operations
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.74
|
|
Restructuring charges
(2)
|
0.16
|
|
|
0.03
|
|
|
0.12
|
|
|||
Intangible asset amortization
(3)
|
0.08
|
|
|
—
|
|
|
—
|
|
|||
Acquisition-related transaction costs
(3)
|
0.05
|
|
|
—
|
|
|
—
|
|
|||
Tax reform - repatriation tax
(4)
|
(0.07
|
)
|
|
0.68
|
|
|
—
|
|
|||
Tax reform - deferred tax rate change
(4)
|
(0.02
|
)
|
|
0.24
|
|
|
—
|
|
|||
Tax reform-related item - employee bonus
(4)
|
0.02
|
|
|
0.26
|
|
|
—
|
|
|||
Tax reform-related item - charitable contribution
(4)
|
—
|
|
|
0.07
|
|
|
—
|
|
|||
Net CRT/LCD settlements
(5)
|
—
|
|
|
—
|
|
|
(0.50
|
)
|
|||
Other Canada brand consolidation charges - SG&A
(6)
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
(Gain) loss on sale of investments, net
(7)
|
(0.04
|
)
|
|
0.02
|
|
|
(0.01
|
)
|
|||
Income tax impact of non-GAAP adjustments
(8)
|
(0.06
|
)
|
|
(0.14
|
)
|
|
0.15
|
|
|||
Non-GAAP diluted earnings per share from continuing operations
|
$
|
5.32
|
|
|
$
|
4.42
|
|
|
$
|
3.51
|
|
(1)
|
Beginning in the first quarter of fiscal 2018, we no longer exclude non-restructuring property and equipment impairment charges from our non-GAAP financial measures. To ensure our financial results are comparable, we have recast fiscal 2017 balances to conform to this presentation. Refer to the
Overview
section within this MD&A for more information.
|
(2)
|
Refer to Note 9,
Restructuring Charges
, in the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K for additional information regarding the nature of these charges. For fiscal 2019, $47 million related to the U.S. and a benefit of $1 million related to Canada. For fiscal 2018, $9 million related to the U.S. and $1 million related to Canada. For fiscal 2017, $31 million related to the U.S. and $8 million related to Canada.
|
(3)
|
Represents charges associated with the acquisition of GreatCall, including (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and technology, and (2) acquisition-related transaction costs primarily comprised of professional fees. Refer to Note 2,
Acquisition
, in the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K for additional information.
|
(4)
|
Represents charges and subsequent adjustments resulting from the Tax Act enacted into law in the fourth quarter of fiscal 2018, including amounts associated with a deemed repatriation tax and the revaluation of deferred tax assets and liabilities, as well as tax reform-related items announced in response to future tax savings created by the Tax Act, including a one-time bonus for certain employees and a one-time contribution to the Best Buy Foundation.
|
(5)
|
Represents CRT and LCD litigation settlements reached related to the U.S., net of related legal fees and costs. The settlements related to products purchased and sold in prior fiscal years.
|
(6)
|
Represents charges related to the Canadian brand consolidation initiated in the first quarter of fiscal 2016, primarily due to retention bonuses and other store-related costs that were a direct result of the consolidation but did not qualify as restructuring charges.
|
(7)
|
Represents (gain) loss on sale of investments and investment impairments included in Investment income and other on our Consolidated Statements of Earnings.
|
(8)
|
Represents the summation of the calculated income tax charge related to each non-GAAP non-income tax adjustment. The non-GAAP adjustments relate primarily to adjustments in the U.S. and Canada. As such, the income tax charge is calculated using the statutory tax rates for the U.S. (24.5%, 36.7% and 38.0% for fiscal 2019, fiscal 2018 and fiscal 2017, respectively) and Canada (26.9%, 26.6% and 26.6% for fiscal 2019, fiscal 2018 and fiscal 2017, respectively), applied to the non-GAAP adjustments of each country.
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Cash and cash equivalents
|
$
|
1,980
|
|
|
$
|
1,101
|
|
Short-term investments
|
—
|
|
|
2,032
|
|
||
Total cash and cash equivalents and short-term investments
|
$
|
1,980
|
|
|
$
|
3,133
|
|
|
2019
|
|
2018
|
|
2017
(1)
|
||||||
Total cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
2,408
|
|
|
$
|
2,141
|
|
|
$
|
2,557
|
|
Investing activities
|
508
|
|
|
(1,002
|
)
|
|
(877
|
)
|
|||
Financing activities
|
(2,018
|
)
|
|
(2,297
|
)
|
|
(1,418
|
)
|
|||
Effect of exchange rate changes on cash
|
(14
|
)
|
|
25
|
|
|
10
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
884
|
|
|
$
|
(1,133
|
)
|
|
$
|
272
|
|
Rating Agency
|
Rating
|
|
Outlook
|
Standard & Poor's
|
BBB
|
|
Stable
|
Moody's
|
Baa1
|
|
Positive
|
Fitch
|
BBB
|
|
Stable
|
|
2019
|
|
2018
|
|
2017
|
||||||
New stores
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
3
|
|
Store-related projects
(1)
|
259
|
|
|
192
|
|
|
190
|
|
|||
E-commerce and information technology
|
448
|
|
|
425
|
|
|
347
|
|
|||
Supply chain
|
107
|
|
|
66
|
|
|
40
|
|
|||
Total capital expenditures
(2)
|
$
|
819
|
|
|
$
|
688
|
|
|
$
|
580
|
|
(1)
|
Includes store remodels and various merchandising projects.
|
(2)
|
Total capital expenditures exclude non-cash capital expenditures of
$53 million
,
$123 million
and
$48 million
for fiscal
2019
, fiscal
2018
and fiscal
2017
, respectively. Non-cash capital expenditures are comprised of capitalized leases, as well as additions to property and equipment included in accounts payable.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total cost of shares repurchased
|
$
|
1,493
|
|
|
$
|
2,009
|
|
|
$
|
751
|
|
Average price per share
|
$
|
70.28
|
|
|
$
|
57.16
|
|
|
$
|
33.54
|
|
Total number of shares repurchased
|
21.2
|
|
|
35.1
|
|
|
21.1
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Regular quarterly cash dividends per share
|
$
|
1.80
|
|
|
$
|
1.36
|
|
|
$
|
1.12
|
|
Special cash dividends per share
(1)
|
—
|
|
|
—
|
|
|
0.45
|
|
|||
Total cash dividends per share
|
$
|
1.80
|
|
|
$
|
1.36
|
|
|
$
|
1.57
|
|
Cash dividends declared and paid
|
$
|
497
|
|
|
$
|
409
|
|
|
$
|
505
|
|
(1)
|
Special cash dividends are authorized by our Board and issued upon their discretion. Dividends paid in fiscal 2017 are related to the net after-tax proceeds from certain legal settlements and asset disposals.
|
|
|
|
Payments Due by Period
|
||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Long-term debt obligations
(1)
|
$
|
1,150
|
|
|
$
|
—
|
|
|
$
|
650
|
|
|
$
|
—
|
|
|
$
|
500
|
|
Capital lease obligations
|
45
|
|
|
14
|
|
|
18
|
|
|
6
|
|
|
7
|
|
|||||
Financing lease obligations
|
205
|
|
|
48
|
|
|
77
|
|
|
40
|
|
|
40
|
|
|||||
Interest payments
(2)
|
281
|
|
|
62
|
|
|
86
|
|
|
39
|
|
|
94
|
|
|||||
Operating lease obligations
(3)
|
2,961
|
|
|
700
|
|
|
1,161
|
|
|
624
|
|
|
476
|
|
|||||
Purchase obligations
(4)
|
2,340
|
|
|
2,164
|
|
|
101
|
|
|
75
|
|
|
—
|
|
|||||
Unrecognized tax benefits
(5)
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deferred compensation
(6)
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
7,305
|
|
|
$
|
2,988
|
|
|
$
|
2,093
|
|
|
$
|
784
|
|
|
$
|
1,117
|
|
(1)
|
Represents principal amounts only and excludes interest rate swap valuation adjustments.
|
(2)
|
Interest payments related to our 2021 Notes and 2028 Notes include the variable interest rate payments included in our interest rate swap. For additional information refer to Note 5,
Derivative Instruments
, of the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data
, of this Annual Report on Form 10-K.
|
(3)
|
Operating lease obligations do not include payments to landlords covering real estate taxes and common area maintenance. These charges, if included, would increase total operating lease obligations by
$0.8 billion
at
February 2, 2019
.
|
(4)
|
Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include agreements that are cancelable without penalty. Additionally, although they do not contain legally binding purchase commitments, we included open purchase orders in the table above. Substantially all open purchase orders are fulfilled within 30 days.
|
(5)
|
Unrecognized tax benefits relate to uncertain tax positions. As we are not able to reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not been reflected in the "Payments Due by Period" section of the table.
|
(6)
|
Included in Long-term liabilities on our Consolidated Balance Sheets at
February 2, 2019
, was a $
23 million
obligation for deferred compensation. As the specific payment dates for deferred compensation are unknown, the related balances have not been reflected in the "Payments Due by Period" section of the table.
|
(1)
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets;
|
(2)
|
provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board; and
|
(3)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
|
|
|
Hubert Joly
Chairman and Chief Executive Officer
(duly authorized and principal executive officer)
|
|
Corie Barry
Chief Financial Officer
(duly authorized and principal financial officer)
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,980
|
|
|
$
|
1,101
|
|
Short-term investments
|
|
—
|
|
|
2,032
|
|
||
Receivables, net
|
|
1,015
|
|
|
1,049
|
|
||
Merchandise inventories
|
|
5,409
|
|
|
5,209
|
|
||
Other current assets
|
|
466
|
|
|
438
|
|
||
Total current assets
|
|
8,870
|
|
|
9,829
|
|
||
Property and equipment
|
|
|
|
|
||||
Land and buildings
|
|
637
|
|
|
623
|
|
||
Leasehold improvements
|
|
2,119
|
|
|
2,327
|
|
||
Fixtures and equipment
|
|
5,865
|
|
|
5,410
|
|
||
Property under capital and financing leases
|
|
579
|
|
|
340
|
|
||
Gross property and equipment
|
|
9,200
|
|
|
8,700
|
|
||
Less accumulated depreciation
|
|
6,690
|
|
|
6,279
|
|
||
Net property and equipment
|
|
2,510
|
|
|
2,421
|
|
||
Goodwill
|
|
915
|
|
|
425
|
|
||
Other assets
|
|
606
|
|
|
374
|
|
||
Total assets
|
|
$
|
12,901
|
|
|
$
|
13,049
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
5,257
|
|
|
$
|
4,873
|
|
Unredeemed gift card liabilities
|
|
290
|
|
|
385
|
|
||
Deferred revenue
|
|
446
|
|
|
453
|
|
||
Accrued compensation and related expenses
|
|
482
|
|
|
561
|
|
||
Accrued liabilities
|
|
982
|
|
|
1,001
|
|
||
Current portion of long-term debt
|
|
56
|
|
|
544
|
|
||
Total current liabilities
|
|
7,513
|
|
|
7,817
|
|
||
Long-term liabilities
|
|
750
|
|
|
809
|
|
||
Long-term debt
|
|
1,332
|
|
|
811
|
|
||
Contingencies and commitments (Note 13)
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
Best Buy Co., Inc. Shareholders' Equity
|
|
|
|
|
||||
Preferred stock, $1.00 par value: Authorized — 400,000 shares; Issued and outstanding — none
|
|
—
|
|
|
—
|
|
||
Common stock, $0.10 par value: Authorized — 1.0 billion shares; Issued and outstanding — 265,703,000 and 282,988,000 shares, respectively
|
|
27
|
|
|
28
|
|
||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
||
Retained earnings
|
|
2,985
|
|
|
3,270
|
|
||
Accumulated other comprehensive income
|
|
294
|
|
|
314
|
|
||
Total equity
|
|
3,306
|
|
|
3,612
|
|
||
Total liabilities and equity
|
|
$
|
12,901
|
|
|
$
|
13,049
|
|
Fiscal Years Ended
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
Revenue
|
$
|
42,879
|
|
|
$
|
42,151
|
|
|
$
|
39,403
|
|
Cost of goods sold
|
32,918
|
|
|
32,275
|
|
|
29,963
|
|
|||
Gross profit
|
9,961
|
|
|
9,876
|
|
|
9,440
|
|
|||
Selling, general and administrative expenses
|
8,015
|
|
|
8,023
|
|
|
7,547
|
|
|||
Restructuring charges
|
46
|
|
|
10
|
|
|
39
|
|
|||
Operating income
|
1,900
|
|
|
1,843
|
|
|
1,854
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Gain on sale of investments
|
12
|
|
|
1
|
|
|
3
|
|
|||
Investment income and other
|
49
|
|
|
48
|
|
|
31
|
|
|||
Interest expense
|
(73
|
)
|
|
(75
|
)
|
|
(72
|
)
|
|||
Earnings from continuing operations before income tax expense
|
1,888
|
|
|
1,817
|
|
|
1,816
|
|
|||
Income tax expense
|
424
|
|
|
818
|
|
|
609
|
|
|||
Net earnings from continuing operations
|
1,464
|
|
|
999
|
|
|
1,207
|
|
|||
Gain from discontinued operations (Note 3), net of tax expense of $0, $0 and $7, respectively
|
—
|
|
|
1
|
|
|
21
|
|
|||
Net earnings
|
$
|
1,464
|
|
|
$
|
1,000
|
|
|
$
|
1,228
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.30
|
|
|
$
|
3.33
|
|
|
$
|
3.79
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.07
|
|
|||
Basic earnings per share
|
$
|
5.30
|
|
|
$
|
3.33
|
|
|
$
|
3.86
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.74
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.07
|
|
|||
Diluted earnings per share
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.81
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
|
|
|
|
|
||||||
Basic
|
276.4
|
|
|
300.4
|
|
|
318.5
|
|
|||
Diluted
|
281.4
|
|
|
307.1
|
|
|
322.6
|
|
Fiscal Years Ended
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
Net earnings
|
$
|
1,464
|
|
|
$
|
1,000
|
|
|
$
|
1,228
|
|
Foreign currency translation adjustments
|
(20
|
)
|
|
35
|
|
|
10
|
|
|||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Comprehensive income
|
$
|
1,444
|
|
|
$
|
1,035
|
|
|
$
|
1,236
|
|
Fiscal Years Ended
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
Operating activities
|
|
|
|
|
|
|
|||||
Net earnings
|
$
|
1,464
|
|
|
$
|
1,000
|
|
|
$
|
1,228
|
|
Adjustments to reconcile net earnings to total cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
770
|
|
|
683
|
|
|
654
|
|
|||
Restructuring charges
|
46
|
|
|
10
|
|
|
39
|
|
|||
Stock-based compensation
|
123
|
|
|
129
|
|
|
108
|
|
|||
Deferred income taxes
|
10
|
|
|
162
|
|
|
201
|
|
|||
Other, net
|
(25
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|||
Changes in operating assets and liabilities, net of acquired assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
28
|
|
|
315
|
|
|
(193
|
)
|
|||
Merchandise inventories
|
(194
|
)
|
|
(335
|
)
|
|
199
|
|
|||
Other assets
|
(34
|
)
|
|
(21
|
)
|
|
10
|
|
|||
Accounts payable
|
432
|
|
|
(196
|
)
|
|
518
|
|
|||
Other liabilities
|
(234
|
)
|
|
117
|
|
|
23
|
|
|||
Income taxes
|
22
|
|
|
290
|
|
|
(213
|
)
|
|||
Total cash provided by operating activities
|
2,408
|
|
|
2,141
|
|
|
2,557
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to property and equipment, net of $53, $123 and $48, respectively, of non-cash capital expenditures
|
(819
|
)
|
|
(688
|
)
|
|
(580
|
)
|
|||
Purchases of investments
|
—
|
|
|
(4,325
|
)
|
|
(3,045
|
)
|
|||
Sales of investments
|
2,098
|
|
|
4,018
|
|
|
2,689
|
|
|||
Acquisition of businesses, net of cash acquired
|
(787
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
16
|
|
|
(7
|
)
|
|
59
|
|
|||
Total cash provided by (used in) investing activities
|
508
|
|
|
(1,002
|
)
|
|
(877
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Repurchase of common stock
|
(1,505
|
)
|
|
(2,004
|
)
|
|
(698
|
)
|
|||
Issuance of common stock
|
38
|
|
|
163
|
|
|
171
|
|
|||
Dividends paid
|
(497
|
)
|
|
(409
|
)
|
|
(505
|
)
|
|||
Borrowings of debt
|
498
|
|
|
—
|
|
|
—
|
|
|||
Repayments of debt
|
(546
|
)
|
|
(46
|
)
|
|
(394
|
)
|
|||
Other, net
|
(6
|
)
|
|
(1
|
)
|
|
8
|
|
|||
Total cash used in financing activities
|
(2,018
|
)
|
|
(2,297
|
)
|
|
(1,418
|
)
|
|||
Effect of exchange rate changes on cash
|
(14
|
)
|
|
25
|
|
|
10
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
884
|
|
|
(1,133
|
)
|
|
272
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
1,300
|
|
|
2,433
|
|
|
2,161
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
2,184
|
|
|
$
|
1,300
|
|
|
$
|
2,433
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
391
|
|
|
$
|
366
|
|
|
$
|
628
|
|
Interest paid
|
71
|
|
|
81
|
|
|
76
|
|
|
Common
Shares
|
|
|
Common
Stock
|
|
|
Prepaid Share Repurchase
|
|
|
Additional
Paid-In
Capital
|
|
|
Retained
Earnings
|
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
|
Total
Equity
|
|
||||||
Balances at January 30, 2016
|
324
|
|
|
$
|
32
|
|
|
$
|
(55
|
)
|
|
$
|
—
|
|
|
$
|
4,130
|
|
|
$
|
271
|
|
|
$
|
4,378
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,228
|
|
|
—
|
|
|
1,228
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||
Reclassification of foreign currency translation adjustments into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Settlement of accelerated share repurchase
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||
Tax benefits from stock options exercised, restricted stock vesting and employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
108
|
|
||||||
Issuance of common stock
|
8
|
|
|
1
|
|
|
—
|
|
|
170
|
|
|
—
|
|
|
—
|
|
|
171
|
|
||||||
Common stock dividends, $1.57 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
||||||
Repurchase of common stock
|
(21
|
)
|
|
(2
|
)
|
|
—
|
|
|
(295
|
)
|
|
(454
|
)
|
|
—
|
|
|
(751
|
)
|
||||||
Balances at January 28, 2017
|
311
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
4,399
|
|
|
279
|
|
|
4,709
|
|
||||||
Adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(12
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
||||||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
129
|
|
||||||
Issuance of common stock
|
7
|
|
|
1
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
163
|
|
||||||
Common stock dividends, $1.36 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(411
|
)
|
|
—
|
|
|
(411
|
)
|
||||||
Repurchase of common stock
|
(35
|
)
|
|
(4
|
)
|
|
—
|
|
|
(299
|
)
|
|
(1,706
|
)
|
|
—
|
|
|
(2,009
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Balances at February 3, 2018
|
283
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
3,270
|
|
|
314
|
|
|
3,612
|
|
||||||
Adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,464
|
|
|
—
|
|
|
1,464
|
|
||||||
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
||||||
Issuance of common stock
|
4
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||||
Common stock dividends, $1.80 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(497
|
)
|
|
—
|
|
|
(491
|
)
|
||||||
Repurchase of common stock
|
(21
|
)
|
|
(1
|
)
|
|
—
|
|
|
(167
|
)
|
|
(1,325
|
)
|
|
—
|
|
|
(1,493
|
)
|
||||||
Balances at February 2, 2019
|
266
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,985
|
|
|
$
|
294
|
|
|
$
|
3,306
|
|
•
|
ASU 2016-16,
Intra-Entity Transfers of Assets Other Than Inventory
|
•
|
ASU 2017-12,
Derivatives and Hedging
|
•
|
ASU 2018-02,
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
February 3, 2018
As Reported
|
|
ASU 2014-09 Adjustment on February 4, 2018
|
|
February 4, 2018 Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Other assets
|
$
|
374
|
|
|
$
|
(19
|
)
|
|
$
|
355
|
|
Liabilities
|
|
|
|
|
|
||||||
Unredeemed gift card liabilities
|
385
|
|
|
(69
|
)
|
|
316
|
|
|||
Deferred revenue
|
453
|
|
|
(26
|
)
|
|
427
|
|
|||
Accrued liabilities
|
1,001
|
|
|
3
|
|
|
1,004
|
|
|||
Equity
|
|
|
|
|
|
||||||
Retained earnings
|
3,270
|
|
|
73
|
|
|
3,343
|
|
|
February 2, 2019
|
||||||||||
Impact of Changes to Consolidated Balance Sheets
|
As Reported
|
|
Balances without Adoption of
ASU 2014-09
|
|
Effect of Change Higher/(Lower)
(1)
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
466
|
|
|
$
|
410
|
|
|
$
|
56
|
|
Other assets
|
606
|
|
|
625
|
|
|
(19
|
)
|
|||
Liabilities
|
|
|
|
|
|
||||||
Unredeemed gift card liabilities
|
290
|
|
|
352
|
|
|
(62
|
)
|
|||
Deferred revenue
|
446
|
|
|
470
|
|
|
(24
|
)
|
|||
Accrued liabilities
|
982
|
|
|
923
|
|
|
59
|
|
|||
Equity
|
|
|
|
|
|
||||||
Retained earnings
|
2,985
|
|
|
2,921
|
|
|
64
|
|
(1)
|
Effect of change includes the opening retained earnings adjustment as detailed within the table above.
|
|
Fiscal Year Ended February 2, 2019
|
||||||||||
Impact of Changes to Consolidated Statements of Earnings
|
As Reported
|
|
Balances without Adoption of
ASU 2014-09 |
|
Effect of Change Higher/(Lower)
|
||||||
Revenue
|
$
|
42,879
|
|
|
$
|
42,830
|
|
|
$
|
49
|
|
Cost of goods sold
|
32,918
|
|
|
32,860
|
|
|
58
|
|
|||
Gross profit
|
9,961
|
|
|
9,970
|
|
|
(9
|
)
|
|||
Operating income
|
1,900
|
|
|
1,909
|
|
|
(9
|
)
|
|||
Income tax expense
|
424
|
|
|
426
|
|
|
(2
|
)
|
|||
Net earnings
|
1,464
|
|
|
1,471
|
|
|
(7
|
)
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
5.30
|
|
|
$
|
5.32
|
|
|
$
|
(0.02
|
)
|
Diluted earnings per share
|
$
|
5.20
|
|
|
$
|
5.23
|
|
|
$
|
(0.03
|
)
|
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||
Cash and cash equivalents
|
$
|
1,980
|
|
|
$
|
1,101
|
|
|
$
|
2,240
|
|
Restricted cash included in Other current assets
|
204
|
|
|
199
|
|
|
193
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
2,184
|
|
|
$
|
1,300
|
|
|
$
|
2,433
|
|
Asset
|
Life
(in years)
|
Buildings
|
5-35
|
Leasehold improvements
|
2-10
|
Fixtures and equipment
|
2-15
|
Property under capital and financing leases
|
3-7
|
|
February 2, 2019
|
|
February 3, 2018
|
||||||||||||
|
Gross Carrying
Amount
|
|
Cumulative
Impairment
|
|
Gross Carrying
Amount
|
|
Cumulative
Impairment
|
||||||||
Goodwill
|
$
|
1,590
|
|
|
$
|
(675
|
)
|
|
$
|
1,100
|
|
|
$
|
(675
|
)
|
|
February 2, 2019
|
||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||
Customer relationships
|
$
|
258
|
|
|
$
|
16
|
|
Tradename
|
63
|
|
|
3
|
|
||
Developed technology
|
52
|
|
|
4
|
|
||
Total
|
$
|
373
|
|
|
$
|
23
|
|
Fiscal Year
|
Amortization Expense
|
||
2020
|
$
|
68
|
|
2021
|
68
|
|
|
2022
|
67
|
|
|
2023
|
67
|
|
|
2024
|
48
|
|
|
Thereafter
|
32
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Accrued liabilities
|
$
|
69
|
|
|
$
|
67
|
|
Long-term liabilities
|
60
|
|
|
64
|
|
||
Total
|
$
|
129
|
|
|
$
|
131
|
|
Cost of Goods Sold
|
||||
•
|
|
Cost of products sold, including:
|
||
|
|
—
|
|
Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers;
|
|
|
—
|
|
Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs; and
|
|
|
—
|
|
Cash discounts on payments to merchandise vendors;
|
•
|
|
Cost of services provided, including:
|
||
|
|
—
|
|
Payroll and benefit costs for services employees; and
|
|
|
—
|
|
Cost of replacement parts and related freight expenses;
|
•
|
|
Physical inventory losses;
|
||
•
|
|
Markdowns;
|
||
•
|
|
Customer shipping and handling expenses;
|
||
•
|
|
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs and depreciation; and
|
||
•
|
|
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores.
|
Selling, General and Administrative Expenses
|
||||
•
|
|
Payroll and benefit costs for retail and corporate employees;
|
||
•
|
|
Occupancy and maintenance costs of retail, services and corporate facilities;
|
||
•
|
|
Depreciation and amortization related to retail, services and corporate assets;
|
||
•
|
|
Advertising costs;
|
||
•
|
|
Vendor allowances that are a reimbursement of specific, incremental and identifiable costs;
|
||
•
|
|
Tender costs, including bank charges and costs associated with credit and debit card interchange fees;
|
||
•
|
|
Charitable contributions;
|
||
•
|
|
Outside and outsourced service fees;
|
||
•
|
|
Long-lived asset impairment charges; and
|
||
•
|
|
Other administrative costs, such as supplies, travel and lodging.
|
|
Fair Value at Acquisition Date
|
|
Measurement Period Adjustments
|
|
Adjusted Fair Value
|
||||||
Current assets
|
$
|
34
|
|
|
$
|
(2
|
)
|
|
$
|
32
|
|
Goodwill
|
496
|
|
|
(6
|
)
|
|
490
|
|
|||
Intangible assets
(1)
|
371
|
|
|
2
|
|
|
373
|
|
|||
Other assets
|
27
|
|
|
(2
|
)
|
|
25
|
|
|||
Total assets acquired
|
928
|
|
|
(8
|
)
|
|
920
|
|
|||
Accrued liabilities
|
56
|
|
|
(1
|
)
|
|
55
|
|
|||
Long-term liabilities
|
72
|
|
|
(2
|
)
|
|
70
|
|
|||
Total liabilities assumed
|
128
|
|
|
(3
|
)
|
|
125
|
|
|||
Total purchase price
(2)
|
800
|
|
|
(5
|
)
|
|
795
|
|
|||
Less cash acquired
|
8
|
|
|
—
|
|
|
8
|
|
|||
Total purchase price, net of cash acquired
|
$
|
792
|
|
|
$
|
(5
|
)
|
|
$
|
787
|
|
(1)
|
The adjusted fair value of Intangible assets included consumer customer relationships of
$235 million
(amortized over
5 years
), tradename of
$63 million
(amortized over
8 years
), developed technology of
$52 million
(amortized over
5 years
) and commercial customer relationships of
$23 million
(amortized over
10 years
).
|
(2)
|
Measurement period adjustments included the finalization of the working capital adjustment.
|
|
2018
|
|
2017
|
||||
Gain from discontinued operations before income tax expense
|
$
|
1
|
|
|
$
|
28
|
|
Income tax expense
|
—
|
|
|
(7
|
)
|
||
Net earnings from discontinued operations
|
$
|
1
|
|
|
$
|
21
|
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets or liabilities in non-active markets;
|
•
|
Inputs other than quoted prices that are observable for the asset or liability; and
|
•
|
Inputs that are derived principally from or corroborated by other observable market data.
|
|
|
|
Fair Value at
|
||||||
|
Fair Value Hierarchy
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Assets
|
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
||||
Money market funds
|
Level 1
|
|
$
|
98
|
|
|
$
|
21
|
|
Commercial paper
|
Level 2
|
|
—
|
|
|
90
|
|
||
Time deposits
|
Level 2
|
|
300
|
|
|
65
|
|
||
Short-term investments:
|
|
|
|
|
|
|
|||
Commercial paper
|
Level 2
|
|
—
|
|
|
474
|
|
||
Time deposits
|
Level 2
|
|
—
|
|
|
1,558
|
|
||
Other current assets:
|
|
|
|
|
|
||||
Money market funds
|
Level 1
|
|
82
|
|
|
3
|
|
||
Commercial paper
|
Level 2
|
|
—
|
|
|
60
|
|
||
Time deposits
|
Level 2
|
|
101
|
|
|
101
|
|
||
Foreign currency derivative instruments
|
Level 2
|
|
—
|
|
|
2
|
|
||
Other assets:
|
|
|
|
|
|
|
|||
Marketable securities that fund deferred compensation
|
Level 1
|
|
44
|
|
|
99
|
|
||
Interest rate swap derivative instruments
|
Level 2
|
|
26
|
|
|
—
|
|
||
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||||
Accrued liabilities:
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
Level 2
|
|
—
|
|
|
8
|
|
||
Interest rate swap derivative instruments
|
Level 2
|
|
—
|
|
|
1
|
|
||
Long-term liabilities:
|
|
|
|
|
|
||||
Interest rate swap derivative instruments
|
Level 2
|
|
1
|
|
|
4
|
|
|
2019
|
|
2018
|
||||||||||||
|
Impairments
|
|
Remaining Net
Carrying Value
(1)
|
|
Impairments
|
|
Remaining Net
Carrying Value
(1)
|
||||||||
Property and equipment (non-restructuring)
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Property and equipment (restructuring)
(2)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
—
|
|
(1)
|
Remaining net carrying value approximates fair value. Because assets subject to long-lived asset impairment are not measured at fair value on a recurring basis, certain fair value measurements presented in the table may reflect values at earlier measurement dates and may no longer represent the fair values at February 2, 2019, and February 3, 2018.
|
(2)
|
See Note 9,
Restructuring Charges
, for additional information.
|
|
|
Assets
|
||||||
Contract Type
|
Balance Sheet Location
|
February 2, 2019
|
|
February 3, 2018
|
||||
Derivatives designated as net investment hedges
|
Other current assets
|
$
|
—
|
|
|
$
|
2
|
|
Derivatives designated as interest rate swaps
|
Other assets
|
26
|
|
|
—
|
|
||
Total
|
|
$
|
26
|
|
|
$
|
2
|
|
|
|
Liabilities
|
||||||
Contract Type
|
Balance Sheet Location
|
February 2, 2019
|
|
February 3, 2018
|
||||
Derivatives designated as net investment hedges
|
Accrued liabilities
|
$
|
—
|
|
|
$
|
7
|
|
Derivatives designated as interest rate swaps
|
Accrued liabilities and Long-term liabilities
|
1
|
|
|
5
|
|
||
No hedge designation (foreign exchange forward contracts)
|
Accrued liabilities
|
—
|
|
|
1
|
|
||
Total
|
|
$
|
1
|
|
|
$
|
13
|
|
Derivatives designated as net investment hedges
|
2019
|
|
2018
|
||||
Pre-tax gain (loss) recognized in OCI
|
$
|
21
|
|
|
$
|
(14
|
)
|
|
|
Gain (Loss) Recognized
|
||||||
Contract Type
|
Statement of Earnings Location
|
2019
|
|
2018
|
||||
No hedge designation (foreign exchange contracts)
|
SG&A
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
|
Gain (Loss) Recognized
|
||||||
Contract Type
|
Statement of Earnings Location
|
2019
|
|
2018
|
||||
Interest rate swap contracts
|
Interest expense
|
$
|
31
|
|
|
$
|
(18
|
)
|
Adjustments to carrying value of long-term debt
|
Interest expense
|
(31
|
)
|
|
18
|
|
||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Notional Amount
|
||||||
Contract Type
|
February 2, 2019
|
|
February 3, 2018
|
||||
Derivatives designated as net investment hedges
|
$
|
15
|
|
|
$
|
462
|
|
Derivatives designated as interest rate swap contracts
|
1,150
|
|
|
1,150
|
|
||
No hedge designation (foreign exchange forward contracts)
|
9
|
|
|
33
|
|
||
Total
|
$
|
1,174
|
|
|
$
|
1,645
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
2018 Notes
|
$
|
—
|
|
|
$
|
500
|
|
2021 Notes
|
650
|
|
|
650
|
|
||
2028 Notes
|
500
|
|
|
—
|
|
||
Interest rate swap valuation adjustments
|
25
|
|
|
(5
|
)
|
||
Subtotal
|
1,175
|
|
|
1,145
|
|
||
Debt discounts and issuance costs
|
(7
|
)
|
|
(3
|
)
|
||
Financing lease obligations
|
181
|
|
|
191
|
|
||
Capital lease obligations
|
39
|
|
|
22
|
|
||
Total long-term debt
|
1,388
|
|
|
1,355
|
|
||
Less: current portion
|
56
|
|
|
544
|
|
||
Total long-term debt, less current portion
|
$
|
1,332
|
|
|
$
|
811
|
|
Fiscal Year
|
Amount
|
||
2020
|
$
|
—
|
|
2021
|
—
|
|
|
2022
|
650
|
|
|
2023
|
—
|
|
|
2024
|
—
|
|
|
Thereafter
|
525
|
|
|
Total long-term debt
|
$
|
1,175
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stock options
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
9
|
|
Share awards:
|
|
|
|
|
|
||||||
Market-based
|
15
|
|
|
19
|
|
|
15
|
|
|||
Performance-based
|
20
|
|
|
13
|
|
|
6
|
|
|||
Time-based
|
85
|
|
|
91
|
|
|
78
|
|
|||
Total
|
$
|
123
|
|
|
$
|
129
|
|
|
$
|
108
|
|
|
Stock
Options
|
|
Weighted-Average Exercise Price per Share
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate
Intrinsic Value
(in millions)
|
|||||
Outstanding at February 3, 2018
|
3,069,000
|
|
|
$
|
32.32
|
|
|
|
|
|
|
|
Granted
|
161,000
|
|
|
$
|
66.59
|
|
|
|
|
|
|
|
Exercised
|
(869,000
|
)
|
|
$
|
35.54
|
|
|
|
|
|
|
|
Forfeited/canceled
|
(3,000
|
)
|
|
$
|
33.01
|
|
|
|
|
|
|
|
Outstanding at February 2, 2019
|
2,358,000
|
|
|
$
|
33.47
|
|
|
4.9
|
|
$
|
60
|
|
Vested or expected to vest at February 2, 2019
|
2,358,000
|
|
|
$
|
33.47
|
|
|
4.9
|
|
$
|
60
|
|
Exercisable at February 2, 2019
|
2,006,000
|
|
|
$
|
30.21
|
|
|
4.3
|
|
$
|
57
|
|
Valuation Assumptions
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
(1)
|
1.9% – 2.8%
|
|
|
0.9% – 2.6%
|
|
|
0.5% – 2.0%
|
|
Expected dividend yield
|
2.7
|
%
|
|
3.0
|
%
|
|
3.5
|
%
|
Expected stock price volatility
(2)
|
39
|
%
|
|
38
|
%
|
|
37
|
%
|
Expected life of stock options (in years)
(3)
|
6.5
|
|
|
6.0
|
|
|
6.0
|
|
(1)
|
Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options.
|
(2)
|
In projecting expected stock price volatility, we consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock.
|
(3)
|
We estimate the expected life of stock options based upon historical experience.
|
Market-Based Share Awards
|
Shares
|
|
Weighted-Average Fair Value per Share
|
|||
Outstanding at February 3, 2018
|
1,422,000
|
|
|
$
|
36.35
|
|
Granted
|
371,000
|
|
|
$
|
74.27
|
|
Vested
|
(557,000
|
)
|
|
$
|
42.04
|
|
Forfeited/canceled
|
(49,000
|
)
|
|
$
|
40.33
|
|
Outstanding at February 2, 2019
|
1,187,000
|
|
|
$
|
40.07
|
|
Time-Based Share Awards
|
Shares
|
|
Weighted-Average Fair Value per Share
|
|||
Outstanding at February 3, 2018
|
5,050,000
|
|
|
$
|
36.17
|
|
Granted
|
1,543,000
|
|
|
$
|
68.96
|
|
Vested
|
(2,208,000
|
)
|
|
$
|
37.30
|
|
Forfeited/canceled
|
(287,000
|
)
|
|
$
|
47.56
|
|
Outstanding at February 2, 2019
|
4,098,000
|
|
|
$
|
47.13
|
|
Performance-Based Share Awards
|
Shares
|
|
Weighted-Average Fair Value per Share
|
|||
Outstanding at February 3, 2018
|
685,000
|
|
|
$
|
37.04
|
|
Granted
|
354,000
|
|
|
$
|
72.11
|
|
Vested
|
(217,000
|
)
|
|
$
|
34.15
|
|
Forfeited/canceled
|
(3,000
|
)
|
|
$
|
72.05
|
|
Outstanding at February 2, 2019
|
819,000
|
|
|
$
|
52.78
|
|
|
Exercisable
|
|
Unexercisable
|
|
Total
|
||||||||||||||||||||||||
|
Shares
|
|
%
|
|
Weighted-
Average Price
per Share
|
|
Shares
|
|
%
|
|
Weighted-
Average Price
per Share
|
|
Shares
|
|
%
|
|
Weighted-
Average Price
per Share
|
||||||||||||
In-the-money
|
2.0
|
|
|
100
|
%
|
|
$
|
30.21
|
|
|
0.3
|
|
|
75
|
%
|
|
$
|
43.86
|
|
|
2.3
|
|
|
96
|
%
|
|
$
|
31.72
|
|
Out-of-the-money
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
0.1
|
|
|
25
|
%
|
|
$
|
71.52
|
|
|
0.1
|
|
|
4
|
%
|
|
$
|
71.52
|
|
Total
|
2.0
|
|
|
100
|
%
|
|
$
|
30.21
|
|
|
0.4
|
|
|
100
|
%
|
|
$
|
52.01
|
|
|
2.4
|
|
|
100
|
%
|
|
$
|
33.47
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net earnings from continuing operations
|
$
|
1,464
|
|
|
$
|
999
|
|
|
$
|
1,207
|
|
Denominator
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
276.4
|
|
|
300.4
|
|
|
318.5
|
|
|||
Effect of potentially dilutive securities:
|
|
|
|
|
|
||||||
Stock options and other
|
5.0
|
|
|
6.7
|
|
|
4.1
|
|
|||
Weighted-average common shares outstanding, assuming dilution
|
281.4
|
|
|
307.1
|
|
|
322.6
|
|
|||
|
|
|
|
|
|
||||||
Anti-dilutive securities excluded from Weighted-average common shares outstanding, assuming dilution
|
0.2
|
|
|
—
|
|
|
4.5
|
|
|||
|
|
|
|
|
|
||||||
Net earnings per share from continuing operations
|
|
|
|
|
|
||||||
Basic
|
$
|
5.30
|
|
|
$
|
3.33
|
|
|
$
|
3.79
|
|
Diluted
|
$
|
5.20
|
|
|
$
|
3.26
|
|
|
$
|
3.74
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total cost of shares repurchased
|
|
|
|
|
|
||||||
Open market
|
$
|
1,493
|
|
|
$
|
2,009
|
|
|
$
|
706
|
|
January 2016 ASR
|
—
|
|
|
—
|
|
|
45
|
|
|||
Total
|
$
|
1,493
|
|
|
$
|
2,009
|
|
|
$
|
751
|
|
|
|
|
|
|
|
||||||
Average price per share
|
|
|
|
|
|
||||||
Open market
|
$
|
70.28
|
|
|
$
|
57.16
|
|
|
$
|
36.11
|
|
January 2016 ASR
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.55
|
|
Average
|
$
|
70.28
|
|
|
$
|
57.16
|
|
|
$
|
33.54
|
|
|
|
|
|
|
|
||||||
Number of shares repurchased and retired
|
|
|
|
|
|
||||||
Open market
(1)
|
21.2
|
|
|
35.1
|
|
19.5
|
|||||
January 2016 ASR
|
—
|
|
|
—
|
|
|
1.6
|
||||
Total
|
21.2
|
|
|
35.1
|
|
21.1
|
|
|
Foreign Currency Translation
|
||
Balance at January 30, 2016
|
$
|
271
|
|
Foreign currency translation adjustments
|
10
|
|
|
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
(2
|
)
|
|
Balance at January 28, 2017
|
279
|
|
|
Foreign currency translation adjustments
|
35
|
|
|
Balance at February 3, 2018
|
314
|
|
|
Foreign currency translation adjustments
|
(20
|
)
|
|
Balance at February 2, 2019
|
$
|
294
|
|
|
February 2, 2019
|
|
February 4, 2018
|
||||
Receivables, net of an allowance for doubtful accounts of $13 and $24, respectively
|
$
|
565
|
|
|
$
|
674
|
|
Short-term contract liabilities included in:
|
|
|
|
||||
Unredeemed gift cards
|
290
|
|
|
316
|
|
||
Deferred revenue
|
446
|
|
|
408
|
|
||
Accrued liabilities
|
146
|
|
|
151
|
|
||
Long-term contract liabilities included in:
|
|
|
|
||||
Long-term liabilities
|
11
|
|
|
22
|
|
|
Allowance for Doubtful Accounts
|
||
Balance at February 4, 2018
|
$
|
24
|
|
Charged to expenses or other accounts
|
35
|
|
|
Other
(1)
|
(46
|
)
|
|
Balance at February 2, 2019
|
$
|
13
|
|
(1)
|
Includes bad debt write-offs, recoveries and the effect of foreign currency fluctuations.
|
|
Fiscal Year Ended
|
||
|
February 2, 2019
|
||
Revenue recognized that was included in the contract liability balance(s) as of February 4, 2018
|
$
|
871
|
|
Revenue recognized from performance obligations satisfied in previous periods
|
—
|
|
|
Increase due to acquisition
(1)
|
16
|
|
|
Adjustments
(2)
|
(1
|
)
|
(1)
|
Represents an increase in our contract liability balances due to our acquisition of GreatCall, primarily related to deferred revenue.
|
(2)
|
Includes changes in the measure of progress, changes in the estimate of the transaction price or contract modifications.
|
(1)
|
We have elected to exclude unsatisfied performance obligations from contract liability balances with a duration of one year or less. The estimated transaction price revenue disclosed above also does not include amounts of variable consideration attributable to contracts where the consideration is constrained at
February 2, 2019
. Further information about our forms of variable consideration is disclosed below.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Continuing operations
|
|
|
|
|
|
||||||
Best Buy Mobile
|
$
|
47
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Renew Blue Phase 2
|
—
|
|
|
—
|
|
|
26
|
|
|||
Canadian brand consolidation
|
(1
|
)
|
|
(2
|
)
|
|
3
|
|
|||
Renew Blue
|
—
|
|
|
3
|
|
|
5
|
|
|||
Other
|
—
|
|
|
—
|
|
|
5
|
|
|||
Total
|
$
|
46
|
|
|
$
|
10
|
|
|
$
|
39
|
|
|
2019
|
|
2018
|
|
Cumulative Amount
|
||||||
Property and equipment impairments
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Termination benefits
|
(2
|
)
|
|
8
|
|
|
6
|
|
|||
Facility closure and other costs
|
49
|
|
|
—
|
|
|
49
|
|
|||
Total
|
$
|
47
|
|
|
$
|
9
|
|
|
$
|
56
|
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at January 28, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
8
|
|
|
—
|
|
|
8
|
|
|||
Balances at February 3, 2018
|
8
|
|
|
—
|
|
|
8
|
|
|||
Charges
|
1
|
|
|
49
|
|
|
50
|
|
|||
Cash payments
|
(6
|
)
|
|
(48
|
)
|
|
(54
|
)
|
|||
Adjustments
(1)
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Balances at February 2, 2019
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
(1)
|
Adjustments to termination benefits represent changes in retention assumptions.
|
|
Facility
Closure and
Other Costs
|
||
Balances at January 28, 2017
|
$
|
34
|
|
Cash payments
|
(18
|
)
|
|
Adjustments
(1)
|
(2
|
)
|
|
Changes in foreign currency exchange rates
|
1
|
|
|
Balances at February 3, 2018
|
15
|
|
|
Cash payments
|
(7
|
)
|
|
Adjustments
(1)
|
(1
|
)
|
|
Balances at February 2, 2019
|
$
|
7
|
|
(1)
|
Adjustments related to facility closure and other costs represent changes in sublease assumptions.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total rent expense
|
$
|
783
|
|
|
$
|
798
|
|
|
$
|
790
|
|
Less sublease income
|
(15
|
)
|
|
(16
|
)
|
|
(16
|
)
|
|||
Net rent expense
|
$
|
768
|
|
|
$
|
782
|
|
|
$
|
774
|
|
Fiscal Year
|
Capital
Leases
|
|
Financing
Leases
|
|
Operating
Leases
(1)
|
||||||
2020
|
$
|
14
|
|
|
$
|
48
|
|
|
$
|
700
|
|
2021
|
11
|
|
|
42
|
|
|
648
|
|
|||
2022
|
7
|
|
|
35
|
|
|
513
|
|
|||
2023
|
4
|
|
|
24
|
|
|
371
|
|
|||
2024
|
2
|
|
|
16
|
|
|
253
|
|
|||
Thereafter
|
7
|
|
|
40
|
|
|
476
|
|
|||
Total minimum lease payments
|
45
|
|
|
205
|
|
|
$
|
2,961
|
|
||
Less amount representing interest
|
(6
|
)
|
|
(24
|
)
|
|
|
||||
Present value of minimum lease payments
|
39
|
|
|
181
|
|
|
|
||||
Less current maturities
|
(12
|
)
|
|
(43
|
)
|
|
|
|
|||
Present value of minimum lease payments, less current maturities
|
$
|
27
|
|
|
$
|
138
|
|
|
|
|
(1)
|
Operating lease obligations do not include payments to landlords covering real estate taxes and common area maintenance. These charges, if included, would increase total operating lease obligations by
$0.8 billion
at
February 2, 2019
.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Federal income tax at the statutory rate
|
$
|
396
|
|
|
$
|
613
|
|
|
$
|
635
|
|
State income taxes, net of federal benefit
|
58
|
|
|
44
|
|
|
38
|
|
|||
Benefit from foreign operations
|
—
|
|
|
(85
|
)
|
|
(46
|
)
|
|||
Other
|
(7
|
)
|
|
(37
|
)
|
|
(18
|
)
|
|||
Tax Act
|
(23
|
)
|
|
283
|
|
|
—
|
|
|||
Income tax expense
|
$
|
424
|
|
|
$
|
818
|
|
|
$
|
609
|
|
Effective income tax rate
|
22.4
|
%
|
|
45.0
|
%
|
|
33.5
|
%
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
1,574
|
|
|
$
|
1,480
|
|
|
$
|
1,507
|
|
Foreign
|
314
|
|
|
337
|
|
|
309
|
|
|||
Earnings from continuing operations before income tax expense
|
$
|
1,888
|
|
|
$
|
1,817
|
|
|
$
|
1,816
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
275
|
|
|
$
|
547
|
|
|
$
|
317
|
|
State
|
75
|
|
|
59
|
|
|
37
|
|
|||
Foreign
|
64
|
|
|
50
|
|
|
54
|
|
|||
|
414
|
|
|
656
|
|
|
408
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
4
|
|
|
141
|
|
|
163
|
|
|||
State
|
—
|
|
|
11
|
|
|
21
|
|
|||
Foreign
|
6
|
|
|
10
|
|
|
17
|
|
|||
|
10
|
|
|
162
|
|
|
201
|
|
|||
Income tax expense
|
$
|
424
|
|
|
$
|
818
|
|
|
$
|
609
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Accrued property expenses
|
$
|
46
|
|
|
$
|
52
|
|
Other accrued expenses
|
40
|
|
|
43
|
|
||
Deferred revenue
|
52
|
|
|
69
|
|
||
Compensation and benefits
|
74
|
|
|
32
|
|
||
Stock-based compensation
|
35
|
|
|
32
|
|
||
Goodwill and intangibles
|
—
|
|
|
102
|
|
||
Loss and credit carryforwards
|
134
|
|
|
120
|
|
||
Other
|
38
|
|
|
38
|
|
||
Total deferred tax assets
|
419
|
|
|
488
|
|
||
Valuation allowance
|
(91
|
)
|
|
(99
|
)
|
||
Total deferred tax assets after valuation allowance
|
328
|
|
|
389
|
|
||
Property and equipment
|
(184
|
)
|
|
(163
|
)
|
||
Goodwill and intangibles
|
(12
|
)
|
|
—
|
|
||
Inventory
|
(61
|
)
|
|
(47
|
)
|
||
Other
|
(16
|
)
|
|
(20
|
)
|
||
Total deferred tax liabilities
|
(273
|
)
|
|
(230
|
)
|
||
Net deferred tax assets
|
$
|
55
|
|
|
$
|
159
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
$
|
279
|
|
|
$
|
374
|
|
|
$
|
469
|
|
Gross increases related to prior period tax positions
|
4
|
|
|
19
|
|
|
11
|
|
|||
Gross decreases related to prior period tax positions
|
(12
|
)
|
|
(126
|
)
|
|
(144
|
)
|
|||
Gross increases related to current period tax positions
|
36
|
|
|
29
|
|
|
55
|
|
|||
Settlements with taxing authorities
|
(1
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|||
Lapse of statute of limitations
|
(6
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Balance at end of period
|
$
|
300
|
|
|
$
|
279
|
|
|
$
|
374
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue by reportable segment
|
|
|
|
|
|
||||||
Domestic
|
$
|
39,304
|
|
|
$
|
38,662
|
|
|
$
|
36,248
|
|
International
|
3,575
|
|
|
3,489
|
|
|
3,155
|
|
|||
Total revenue
|
$
|
42,879
|
|
|
$
|
42,151
|
|
|
$
|
39,403
|
|
Revenue by product category
(1)
|
|
|
|
|
|
||||||
Domestic
|
|
|
|
|
|
||||||
Computing and Mobile Phones
|
$
|
17,439
|
|
|
$
|
17,386
|
|
|
$
|
16,397
|
|
Consumer Electronics
|
12,959
|
|
|
12,841
|
|
|
12,228
|
|
|||
Appliances
|
4,020
|
|
|
3,717
|
|
|
3,253
|
|
|||
Entertainment
|
2,952
|
|
|
2,905
|
|
|
2,570
|
|
|||
Services
|
1,783
|
|
|
1,674
|
|
|
1,649
|
|
|||
Other
|
151
|
|
|
139
|
|
|
151
|
|
|||
Total Domestic revenue
|
$
|
39,304
|
|
|
$
|
38,662
|
|
|
$
|
36,248
|
|
International
|
|
|
|
|
|
||||||
Computing and Mobile Phones
|
$
|
1,625
|
|
|
$
|
1,612
|
|
|
$
|
1,515
|
|
Consumer Electronics
|
1,103
|
|
|
1,102
|
|
|
974
|
|
|||
Appliances
|
324
|
|
|
273
|
|
|
184
|
|
|||
Entertainment
|
258
|
|
|
254
|
|
|
221
|
|
|||
Services
|
184
|
|
|
174
|
|
|
207
|
|
|||
Other
|
81
|
|
|
74
|
|
|
54
|
|
|||
Total International revenue
|
$
|
3,575
|
|
|
$
|
3,489
|
|
|
$
|
3,155
|
|
Operating income
|
|
|
|
|
|
||||||
Domestic
(2)
|
$
|
1,797
|
|
|
$
|
1,752
|
|
|
$
|
1,764
|
|
International
|
103
|
|
|
91
|
|
|
90
|
|
|||
Total operating income
|
1,900
|
|
|
1,843
|
|
|
1,854
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Gain on sale of investments
|
12
|
|
|
1
|
|
|
3
|
|
|||
Investment income and other
|
49
|
|
|
48
|
|
|
31
|
|
|||
Interest expense
|
(73
|
)
|
|
(75
|
)
|
|
(72
|
)
|
|||
Earnings from continuing operations before income tax expense
|
$
|
1,888
|
|
|
$
|
1,817
|
|
|
$
|
1,816
|
|
Assets
|
|
|
|
|
|
||||||
Domestic
|
$
|
11,908
|
|
|
$
|
11,553
|
|
|
$
|
12,496
|
|
International
|
993
|
|
|
1,496
|
|
|
1,360
|
|
|||
Total assets
|
$
|
12,901
|
|
|
$
|
13,049
|
|
|
$
|
13,856
|
|
Capital expenditures
|
|
|
|
|
|
||||||
Domestic
|
$
|
770
|
|
|
$
|
606
|
|
|
$
|
524
|
|
International
|
49
|
|
|
82
|
|
|
56
|
|
|||
Total capital expenditures
|
$
|
819
|
|
|
$
|
688
|
|
|
$
|
580
|
|
Depreciation
|
|
|
|
|
|
||||||
Domestic
|
$
|
687
|
|
|
$
|
631
|
|
|
$
|
613
|
|
International
|
60
|
|
|
52
|
|
|
41
|
|
|||
Total depreciation
|
$
|
747
|
|
|
$
|
683
|
|
|
$
|
654
|
|
(1)
|
Refer to Item 1,
Business
, of this Annual Report on Form 10-K for additional information regarding the key components of each revenue category. GreatCall results of operations from the date of acquisition were included within the Domestic segment and Services revenue category.
|
(2)
|
The Domestic segment operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue from external customers
|
|
|
|
|
|
||||||
United States
|
$
|
39,304
|
|
|
$
|
38,662
|
|
|
$
|
36,248
|
|
Canada
|
3,214
|
|
|
3,187
|
|
|
2,899
|
|
|||
Other
|
361
|
|
|
302
|
|
|
256
|
|
|||
Total revenue from external customers
|
$
|
42,879
|
|
|
$
|
42,151
|
|
|
$
|
39,403
|
|
Long-lived assets
|
|
|
|
|
|
||||||
United States
|
$
|
2,321
|
|
|
$
|
2,205
|
|
|
$
|
2,120
|
|
Canada
|
161
|
|
|
190
|
|
|
156
|
|
|||
Other
|
28
|
|
|
26
|
|
|
17
|
|
|||
Total long-lived assets
|
$
|
2,510
|
|
|
$
|
2,421
|
|
|
$
|
2,293
|
|
|
Quarter
|
|
|
||||||||||||||||
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
|
Fiscal Year
|
||||||||||
Fiscal 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
9,109
|
|
|
$
|
9,379
|
|
|
$
|
9,590
|
|
|
$
|
14,801
|
|
|
$
|
42,879
|
|
Comparable sales growth
(1)
|
7.1
|
%
|
|
6.2
|
%
|
|
4.3
|
%
|
|
3.0
|
%
|
|
4.8
|
%
|
|||||
Gross profit
|
$
|
2,125
|
|
|
$
|
2,229
|
|
|
$
|
2,324
|
|
|
$
|
3,283
|
|
|
$
|
9,961
|
|
Operating income
(2)
|
265
|
|
|
335
|
|
|
322
|
|
|
978
|
|
|
1,900
|
|
|||||
Net earnings
(3)
|
$
|
208
|
|
|
$
|
244
|
|
|
$
|
277
|
|
|
$
|
735
|
|
|
$
|
1,464
|
|
Diluted earnings per share
(4)
|
$
|
0.72
|
|
|
$
|
0.86
|
|
|
$
|
0.99
|
|
|
$
|
2.69
|
|
|
$
|
5.20
|
|
|
Quarter
|
|
|
||||||||||||||||
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
|
Fiscal Year
|
||||||||||
Fiscal 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
8,528
|
|
|
$
|
8,940
|
|
|
$
|
9,320
|
|
|
$
|
15,363
|
|
|
$
|
42,151
|
|
Comparable sales growth
(1)
|
1.6
|
%
|
|
5.4
|
%
|
|
4.4
|
%
|
|
9.0
|
%
|
|
5.6
|
%
|
|||||
Gross profit
|
$
|
2,022
|
|
|
$
|
2,153
|
|
|
$
|
2,280
|
|
|
$
|
3,421
|
|
|
$
|
9,876
|
|
Operating income
(5)
|
300
|
|
|
321
|
|
|
350
|
|
|
872
|
|
|
1,843
|
|
|||||
Net earnings from continuing operations
(6)
|
188
|
|
|
209
|
|
|
238
|
|
|
364
|
|
|
999
|
|
|||||
Gain from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net earnings
|
$
|
188
|
|
|
$
|
209
|
|
|
$
|
239
|
|
|
$
|
364
|
|
|
$
|
1,000
|
|
Diluted earnings per share
(4)
|
$
|
0.60
|
|
|
$
|
0.67
|
|
|
$
|
0.78
|
|
|
$
|
1.23
|
|
|
$
|
3.26
|
|
(1)
|
Our comparable sales calculation compares revenue from stores, websites and call centers operating for at least
14
full months, as well as revenue related to certain other comparable sales channels for a particular period to the corresponding period in the prior year. Relocated stores, as well as remodeled, expanded and downsized stores closed more than
14
days, are excluded from our comparable sales calculation until at least
14
full months after reopening. Acquisitions are included in the comparable sales calculation beginning with the first full quarter following the first anniversary of the date of the acquisition. Comparable sales also exclude the impact of the extra week in fiscal 2018. On March 1, 2018, we announced our intent to close all of our
|
(2)
|
Includes
$30 million
,
$17 million
,
$0 million
and
$(1) million
of restructuring charges (benefit) recorded in the fiscal first, second, third and fourth quarters of 2019, respectively, and
$46 million
for the fiscal year ended February 2, 2019, related to measures we took to restructure our businesses. Also includes
$13 million
of acquisition-related transaction costs in the fiscal third quarter of 2019 and
$5 million
and
$17 million
of non-cash amortization of definite-lived intangible assets in the fiscal third and fourth quarters of 2019, respectively, associated with the acquisition of GreatCall. Total non-cash amortization of definite-lived intangible assets for the fiscal year ended February 2, 2019 was
$22 million
. The fiscal first quarter and year ended February 2, 2019, also includes
$7 million
related to the one-time bonus for certain employees in response to future tax savings created by the Tax Act.
|
(3)
|
Includes subsequent adjustments resulting from the Tax Act, including
$(18) million
,
$(2) million
and
$(20) million
associated with the deemed repatriation tax recorded in the fiscal third quarter, fourth quarter and year ended February 2, 2019, respectively, and
$(5) million
and
$(5) million
related to the revaluation of deferred tax assets and liabilities recorded in the fiscal third quarter and year ended February 2, 2019, respectively.
|
(4)
|
The sum of our quarterly diluted earnings per share does not equal our annual diluted earnings per share due to differences in quarterly and annual weighted-average shares outstanding.
|
(5)
|
Includes
$0 million
,
$2 million
,
$(2) million
and
$10 million
of restructuring charges (benefit) recorded in the fiscal first, second, third and fourth quarters of 2018, respectively, and
$10 million
for the fiscal year ended February 3, 2018, related to measures we took to restructure our businesses. Also includes
$80 million
related to a one-time bonus for certain employees and
$20 million
related to a one-time contribution to the Best Buy Foundation in response to future tax savings created by the Tax Act for the fiscal fourth quarter and year ended February 3, 2018.
|
(6)
|
Includes
$283 million
of charges resulting from the Tax Act for the fiscal fourth quarter and year ended February 3, 2018, including
$209 million
associated with the deemed repatriation tax and
$74 million
primarily related to the revaluation of deferred tax assets and liabilities.
|
Plan Category
|
Securities to Be Issued Upon Exercise of Outstanding Options and Rights
(1)
(a)
|
|
Weighted Average Exercise Price per Share of Outstanding Options and Rights
(2)
(b) |
|
Securities Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(3)
(c) |
|||
Equity compensation plans approved by security holders
|
5,477,727
|
|
$
|
33.47
|
|
|
19,088,197
|
|
(1)
|
Includes grants of stock options and restricted stock units (which may be market-based, performance-based or time-based) awarded under our 2004 Omnibus Stock and Incentive Plan, as amended, and our 2014 Omnibus Incentive Plan.
|
(2)
|
Includes weighted-average exercise price of outstanding stock options only.
|
(3)
|
Includes
3,881,751
shares of our common stock which have been reserved for issuance under our 2008 and 2003 Employee Stock Purchase Plans.
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial Statements:
|
2.
|
Supplementary Financial Statement Schedules:
|
3.
|
Exhibits:
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
|||||
No.
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Herewith
|
|
|
|
8-K
|
|
2.1
|
|
|
4/30/2013
|
|
|
||
|
|
DEF 14A
|
|
n/a
|
|
|
5/12/2009
|
|
|
||
|
|
8-K
|
|
3.1
|
|
|
6/14/2018
|
|
|
||
|
|
S-3ASR
|
|
4.1
|
|
|
3/8/2011
|
|
|
||
|
|
8-K
|
|
4.2
|
|
|
3/11/2011
|
|
|
||
|
|
8-K
|
|
4.1
|
|
|
7/16/2013
|
|
|
||
|
|
8-K
|
|
4.1
|
|
|
9/27/2018
|
|
|
||
|
|
8-K
|
|
10.1
|
|
|
4/20/2018
|
|
|
||
|
|
S-8
|
|
99
|
|
|
7/15/2011
|
|
|
||
|
|
10-K
|
|
10.7
|
|
|
4/28/2010
|
|
|
||
|
|
10-Q
|
|
10.3
|
|
|
9/6/2012
|
|
|
||
|
|
8-K
|
|
10.1
|
|
|
8/21/2012
|
|
|
||
|
|
8-K
|
|
99.2
|
|
|
3/25/2013
|
|
|
||
|
|
10-K
|
|
10.19
|
|
|
3/28/2014
|
|
|
||
|
|
10-K
|
|
10.20
|
|
|
3/28/2014
|
|
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
||||||
No.
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Herewith
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
12/5/2014
|
|
|
||
|
|
|
S-8
|
|
99
|
|
|
6/27/2014
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
9/10/2014
|
|
|
||
|
|
|
10-K
|
|
10.19
|
|
|
3/31/2015
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
9/4/2015
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
6/9/2016
|
|
|
||
|
|
|
10-Q
|
|
10.2
|
|
|
6/9/2016
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
6/5/2017
|
|
|
||
|
|
|
10-Q
|
|
10.2
|
|
|
6/5/2017
|
|
|
||
|
|
|
S-8
|
|
99
|
|
|
6/21/2017
|
|
|
||
|
|
|
10-Q
|
|
10.2
|
|
|
9/5/2017
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
6/8/2018
|
|
|
||
|
|
|
10-Q
|
|
10.2
|
|
|
6/8/2018
|
|
|
||
|
|
|
10-Q
|
|
10.1
|
|
|
9/10/2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
101
|
|
|
The following financial information from our Annual Report on Form 10-K for fiscal 2019, filed with the SEC on March 28, 2019, formatted in Extensible Business Reporting Language (XBRL): (i) the consolidated balance sheets at February 2, 2019, and February 3, 2018, (ii) the consolidated statements of earnings for the years ended February 2, 2019, February 3, 2018, and January 28, 2017, (iii) the consolidated statements of comprehensive income for the years ended February 2, 2019, February 3, 2018, and January 28, 2017, (iv) the consolidated statements of cash flows for the years ended February 2, 2019, February 3, 2018, and January 28, 2017, (v) the consolidated statements of changes in shareholders' equity for the years ended February 2, 2019, February 3, 2018, and January 28, 2017, and (vi) the Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
Best Buy Co., Inc.
(Registrant)
|
||
By:
|
|
/s/ Hubert Joly
|
|
|
Hubert Joly
Chairman and Chief Executive Officer
|
|
|
March 28, 2019
|
Signature
|
|
Title
|
|
Date
|
/s/ Hubert Joly
|
|
Chairman and Chief Executive Officer
|
|
March 28, 2019
|
Hubert Joly
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ Corie Barry
|
|
Chief Financial Officer
|
|
March 28, 2019
|
Corie Barry
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ Mathew R. Watson
|
|
Senior Vice President, Controller and Chief Accounting Officer
|
|
March 28, 2019
|
Mathew R. Watson
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/s/ Lisa M. Caputo
|
|
Director
|
|
March 28, 2019
|
Lisa M. Caputo
|
|
|
|
|
|
|
|
|
|
/s/ J. Patrick Doyle
|
|
Director
|
|
March 28, 2019
|
J. Patrick Doyle
|
|
|
|
|
|
|
|
|
|
/s/ Russell P. Fradin
|
|
Director
|
|
March 28, 2019
|
Russell P. Fradin
|
|
|
|
|
|
|
|
|
|
/s/ Kathy J. Higgins Victor
|
|
Director
|
|
March 28, 2019
|
Kathy J. Higgins Victor
|
|
|
|
|
|
|
|
|
|
/s/ David W. Kenny
|
|
Director
|
|
March 28, 2019
|
David W. Kenny
|
|
|
|
|
|
|
|
|
|
/s/ Karen A. McLoughlin
|
|
Director
|
|
March 28, 2019
|
Karen A. McLoughlin
|
|
|
|
|
|
|
|
|
|
/s/ Thomas L. Millner
|
|
Director
|
|
March 28, 2019
|
Thomas L. Millner
|
|
|
|
|
|
|
|
|
|
/s/ Claudia F. Munce
|
|
Director
|
|
March 28, 2019
|
Claudia F. Munce
|
|
|
|
|
|
|
|
|
|
/s/ Richelle P. Parham
|
|
Director
|
|
March 28, 2019
|
Richelle P. Parham
|
|
|
|
|
|
|
|
|
|
/s/ Cindy R. Kent
|
|
Director
|
|
March 28, 2019
|
Cindy R. Kent
|
|
|
|
|
|
|
|
|
|
/s/ Eugene A. Woods
|
|
Director
|
|
March 28, 2019
|
Eugene A. Woods
|
|
|
|
|
|
|
|
|
|
|
Balance at
Beginning
of Period
|
|
Charged to
Expenses or
Other Accounts
|
|
Other
(1)
|
|
Balance at
End of
Period
|
||||||||
Year ended February 2, 2019
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
37
|
|
|
$
|
33
|
|
|
$
|
(47
|
)
|
|
$
|
23
|
|
Year ended February 3, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
52
|
|
|
$
|
29
|
|
|
$
|
(44
|
)
|
|
$
|
37
|
|
Year ended January 28, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
49
|
|
|
$
|
44
|
|
|
$
|
(41
|
)
|
|
$
|
52
|
|
(1)
|
Includes bad debt write-offs, recoveries and the effect of foreign currency fluctuations.
|
|
|
State or Other Jurisdiction of Incorporation or Organization
|
BBC Investment Co.
|
|
Nevada
|
BBY Networks, Inc.
|
|
Minnesota
|
BBC Property Co.
|
|
Minnesota
|
Best Buy Stores, L.P. (1)
|
|
Virginia
|
BBY Services, Inc.
|
|
Delaware
|
BestBuy.com, LLC
|
|
Virginia
|
Best Buy Puerto Rico Holdings, LLC
|
|
Puerto Rico
|
Best Buy Stores Puerto Rico, LLC
|
|
Puerto Rico
|
Best Buy Texas.com, LLC
|
|
Virginia
|
Best Buy Warehousing Logistics, Inc.
|
|
Delaware
|
Nichols Distribution, LLC
|
|
Minnesota
|
Magnolia Hi-Fi, LLC (2)
|
|
Washington
|
Pacific Sales Kitchen and Bath Centers, LLC
|
|
California
|
ProTheo III, LLC
|
|
Delaware
|
BBY Holdings International, Inc.
|
|
Minnesota
|
Best Buy China Holdings, Ltd.
|
|
Mauritius
|
Best Buy Shanghai, Ltd.
|
|
China
|
Best Buy Enterprise Services, Inc.
|
|
Minnesota
|
BBY Canada Finance, LLC
|
|
Delaware
|
BBY Solutions, Inc.
|
|
Minnesota
|
Best Buy Canada Ltd. / Magasins Best Buy LTEE (3)
|
|
Canada+
|
Best Buy China Ltd.
|
|
Bermuda
|
Best Buy Purchasing LLC (4)
|
|
Minnesota
|
Partsearch Technologies, Inc.
|
|
Delaware
|
ProTheo, Inc.
|
|
Delaware
|
ProTheo IV, LLC
|
|
Delaware
|
ProTheo V, LLC
|
|
Delaware
|
BBY (Barbados) SRL
|
|
Barbados
|
Best Buy Distributions Limited
|
|
United Kingdom
|
New CPWM Limited
|
|
United Kingdom
|
Oval (2248) Limited
|
|
United Kingdom
|
Best Buy Finance, Inc.
|
|
Minnesota
|
BBY Global Connect (Mauritius I) Ltd.
|
|
Mauritius
|
BBY Global Connect (Mauritius II) Ltd.
|
|
Mauritius
|
BBY (Mauritius I) Ltd.
|
|
Mauritius
|
BBY (Mauritius II) Ltd.
|
|
Mauritius
|
Best Buy China %
|
|
China
|
BBY (Mauritius III) Ltd.
|
|
Mauritius
|
Best Buy (AsiaPacific) Limited
|
|
China
|
Best Buy China UK, LLP
|
|
United Kingdom
|
Best Buy International Finance, S.a.r.l.
|
|
Luxembourg
|
Best Buy Enterprises, S. de R.L. de C.V.
|
|
Mexico, Federal District
|
Best Buy Imports, S. de R.L. de C.V.
|
|
Mexico, Federal District
|
Best Buy Stores, S. de R.L. de C.V.
|
|
Mexico, Federal District
|
ExB Hong Kong Limited
|
|
Hong Kong
|
Global Connect China%
|
|
China
|
Best Buy Mobile (Nanjing) Management Consulting Co., Ltd.
|
|
China
|
CCL Insurance Company
|
|
Vermont
|
CP Gal Richfield, LLC
|
|
Delaware
|
GC Buyer, Inc.
|
|
Delaware
|
GreatCall, Inc.
|
|
Delaware
|
Accessible Wireless, LLC
|
|
Delaware
|
*
|
Indirect subsidiaries are indicated by indentation.
|
+
|
Federally chartered
|
%
|
China Business Trust
|
(1)
|
Best Buy Express; Geek Squad; Magnolia Home Theater; Pacific Kitchen and Home Bath Centers; Pacific Kitchen and Home; Pacific Sales; Pacific Sales Kitchen & Bath Centers; Pacific Sales Kitchen and Home; TechLiquidators
|
(2)
|
Magnolia Design Center
|
(3)
|
Geek Squad
|
(4)
|
Pacific Kitchen and Bath Centers; Pacific Sales Kitchen and Home
|
Date:
|
March 28, 2019
|
/s/ Hubert Joly
|
|
|
Hubert Joly
|
|
|
Chairman and Chief Executive Officer
|
Date:
|
March 28, 2019
|
/s/ Corie Barry
|
|
|
Corie Barry
|
|
|
Chief Financial Officer
|
Date:
|
March 28, 2019
|
/s/ Hubert Joly
|
|
|
Hubert Joly
|
|
|
Chairman and Chief Executive Officer
|
Date:
|
March 28, 2019
|
/s/ Corie Barry
|
|
|
Corie Barry
|
|
|
Chief Financial Officer
|