9ecd340a61745a1648d9e791e7a493f698d33e7568f997114099a4f66fda82cc

Best Buy Co., Inc. operates in the U.S. and Canada, focusing on retailing consumer electronics and related services. The company is divided into two segments: Domestic, which includes all U.S. operations and Best Buy Health, and International, which covers Canadian operations **[0000764478-24-000010_bby-20240203x10k.htm:4]** **[0000764478-24-000010_bby-20240203x10k.htm:41]**. Best Buy offers a wide range of products, including computing and mobile phones, consumer electronics, appliances, entertainment, and services, and emphasizes its exclusive brands like Best Buy Essentials, Dynex, and Insignia **[0000764478-24-000010_bby-20240203x10k.htm:92]** **[0000764478-24-000010_bby-20240203x10k.htm:21]**.

1. **Computing and Mobile Phones** - Offers a variety of computing devices and mobile phones, catering to both personal and professional needs.
2. **Consumer Electronics** - Provides a broad selection of electronic devices, including televisions, audio systems, and cameras.
3. **Appliances** - Sells major household appliances such as refrigerators, washers, and ovens.
4. **Entertainment** - Features a range of entertainment products, including video games, movies, and music.
5. **Services** - Delivers various services, including installation, repair, and technical support for electronic devices.

d39970ab99ba20e2f47db71711bc14f1d28490cb8293be08e6d374d548cfce9a

Computing and Mobile Phones Comparable Sales % Change

Consumer Electronics Comparable Sales % Change

Appliances Comparable Sales % Change

Entertainment Comparable Sales % Change

Services Comparable Sales % Change

Other Comparable Sales % Change

Computing and Mobile Phones International Comparable Sales % Change

Consumer Electronics International Comparable Sales % Change

Appliances International Comparable Sales % Change

Entertainment International Comparable Sales % Change

Services International Comparable Sales % Change

Other International Comparable Sales % Change

Computing and Mobile Phones International Revenue Mix %

Consumer Electronics International Revenue Mix %

Appliances International Revenue Mix %

Entertainment International Revenue Mix %

Services International Revenue Mix %

Other International Revenue Mix %

7d3a812a63f4aee146bba0e6d7a9fa13f7267809c7df202468adea779b4381e9

| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|--------|---------|---------|---------|---------|---------|---------|
| Computing and Mobile Phones Comparable Sales % Change | **-13.3%** **[0000764478-23-000025_bby-20230429x10q.htm:17]** | **-6.4%** **[0000764478-23-000041_bby-20230729x10q.htm:20]** | **-8.3%** **[0000764478-23-000053_bby-20231028x10q.htm:19]** | **-2.2%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **3.9%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **3.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Consumer Electronics Comparable Sales % Change | **-9.8%** **[0000764478-23-000025_bby-20230429x10q.htm:17]** | **-5.7%** **[0000764478-23-000041_bby-20230729x10q.htm:20]** | **-9.5%** **[0000764478-23-000053_bby-20231028x10q.htm:19]** | **-8.3%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **-6.2%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **-5.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Appliances Comparable Sales % Change | **-15.5%** **[0000764478-23-000025_bby-20230429x10q.htm:17]** | **-16.1%** **[0000764478-23-000041_bby-20230729x10q.htm:20]** | **-15.1%** **[0000764478-23-000053_bby-20231028x10q.htm:19]** | **-18.5%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **-14.9%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **-14.7%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Entertainment Comparable Sales % Change | **3.8%** **[0000764478-23-000025_bby-20230429x10q.htm:17]** | **9.0%** **[0000764478-23-000041_bby-20230729x10q.htm:20]** | **20.6%** **[0000764478-23-000053_bby-20231028x10q.htm:19]** | **-11.3%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **-7.4%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **-18.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Services Comparable Sales % Change | **12.0%** **[0000764478-23-000025_bby-20230429x10q.htm:17]** | **7.6%** **[0000764478-23-000041_bby-20230729x10q.htm:20]** | **6.9%** **[0000764478-23-000053_bby-20231028x10q.htm:19]** | **9.0%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **8.5%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **6.0%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Other Comparable Sales % Change | **-12.1%** **[0000764478-23-000019_bby-20230525xex99.htm:9]** | **2.4%** **[0000764478-23-000038_bby-20230829xex99.htm:9]** | **4.7%** **[0000764478-23-000049_bby-20231121xex99.htm:7]** | **18.2%** **[0000764478-24-000022_bby-20240504x10q.htm:17]** | **14.4%** **[0000764478-24-000035_bby-20240803x10q.htm:19]** | **12.9%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Computing and Mobile Phones International Comparable Sales % Change | **-3.6%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **-2.4%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **-1.0%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **0.7%** **[0000764478-24-000022_bby-20240504x10q.htm:19]** | **1.7%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **3.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Consumer Electronics International Comparable Sales % Change | **-9.1%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **-10.4%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **-8.4%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **-6.6%** **[0000764478-24-000022_bby-20240504x10q.htm:19]** | **-2.1%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **-5.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Appliances International Comparable Sales % Change | **-11.7%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **-6.1%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **4.0%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **2.0%** **[0000764478-24-000022_bby-20240504x10q.htm:19]** | **-3.9%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **-14.7%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Entertainment International Comparable Sales % Change | **12.0%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **2.5%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **18.6%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **-22.9%** **[0000764478-24-000022_bby-20240504x10q.htm:19]** | **-20.8%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **-18.8%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Services International Comparable Sales % Change | **-11.2%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **4.6%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **2.4%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **5.0%** **[0000764478-24-000022_bby-20240504x10q.htm:19]** | **5.9%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **6.0%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Other International Comparable Sales % Change | **-19.0%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **-38.1%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **-37.5%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **-13.4%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **-20.1%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **12.9%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Computing and Mobile Phones International Revenue Mix % | **47%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **45%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **50%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **50%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **46%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **52%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Consumer Electronics International Revenue Mix % | **28%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **28%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **26%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **27%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **28%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **26%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Appliances International Revenue Mix % | **9%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **13%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **10%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **9%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **13%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **9%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Entertainment International Revenue Mix % | **9%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **7%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **7%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **7%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **6%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **6%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Services International Revenue Mix % | **5%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **5%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **6%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **6%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **6%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **6%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |
| Other International Revenue Mix % | **2%** **[0000764478-23-000025_bby-20230429x10q.htm:18]** | **2%** **[0000764478-23-000041_bby-20230729x10q.htm:21]** | **1%** **[0000764478-23-000053_bby-20231028x10q.htm:20]** | **1%** **[0000764478-24-000022_bby-20240504x10q.htm:18]** | **1%** **[0000764478-24-000035_bby-20240803x10q.htm:20]** | **1%** **[0000764478-24-000038_bby-20241126xex99.htm:8]** |

258ea907770d7fd3d83e6128bda422a7ab3ad3f01904ca024e8c1eaab003ef34

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

06588025ba93b62ae6c945a22bbf6fad7db0081b7d08c0f546d381cf25bd0849

| Metric (in billions) | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Domestic Revenue     | **$13.53**  **[0000764478-23-000003_bby-20230302xex99.htm:0]** **[0000764478-23-000003_bby-20230302xex99.htm:1]**  | **$8.801**  **[0000764478-23-000025_bby-20230429x10q.htm:16]**  | **$8.89**  **[0000764478-23-000041_bby-20230729x10q.htm:19]**  | **$8.996**  **[0000764478-23-000049_bby-20231121xex99.htm:1]** **[0000764478-23-000049_bby-20231121xex99.htm:7]** **[0000764478-23-000053_bby-20231028x10q.htm:18]**  | **$13.41**  **[0000764478-24-000003_bby-20240229xex99.htm:1]**  | **$8.203**  **[0000764478-24-000022_bby-20240504x10q.htm:16]**  | **$8.623**  **[0000764478-24-000031_bby-20240829xex99.htm:1]**  | **$8.70**  **[0000764478-24-000038_bby-20241126xex99.htm:1]**  |
| International Revenue| **$1.20**  **[0000764478-23-000003_bby-20230302xex99.htm:0]** **[0000764478-23-000003_bby-20230302xex99.htm:1]**   | **$666**  **[0000764478-23-000025_bby-20230429x10q.htm:18]**    | **$693**  **[0000764478-23-000041_bby-20230729x10q.htm:21]**   | **$760**  **[0000764478-23-000049_bby-20231121xex99.htm:1]** **[0000764478-23-000049_bby-20231121xex99.htm:7]** **[0000764478-23-000053_bby-20231028x10q.htm:18]**    | **$1.24**  **[0000764478-24-000003_bby-20240229xex99.htm:1]**   | **$644**  **[0000764478-24-000022_bby-20240504x10q.htm:16]**    | **$665**  **[0000764478-24-000031_bby-20240829xex99.htm:1]**   | **$748**  **[0000764478-24-000038_bby-20241126xex99.htm:1]**   |

0f6b0e805d0fe7e70bfcb68fc152aff1d3a87994a1c2698e13a728d9eb91a036

| Name              | Position                                                                 | Start Date | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|-------------------|--------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Corie S. Barry    | Chief Executive Officer                                                  | 2019       | Corie S. Barry has been the **Chief Executive Officer** of Best Buy Co., Inc. since **2019**. She joined Best Buy in **1999** and has held various financial and operational roles within the company. Before becoming CEO, she served as the Chief Financial Officer from **2016 to 2019** and was also the Chief Strategic Transformation Officer from **2018 to 2019**  **[0000764478-24-000010_bby-20240203x10k.htm:35]** **[0001140361-24-023237_ny20018247x1_def14a.htm:34]** **[0000764478-23-000006_bby-20230128x10k.htm:34]** **[0001140361-23-022482_ny20006533x1_def14a.htm:35]** . |
| Matt Bilunas      | Senior Executive Vice President of Enterprise Strategy, Chief Financial Officer | 2019       | Matt Bilunas is the **Senior Executive Vice President of Enterprise Strategy and Chief Financial Officer** at Best Buy Co., Inc. He joined Best Buy in **2006** and has served in various financial leadership roles both in the field and at the corporate level. Before becoming CFO in **2019**, he was the Senior Vice President of Enterprise and Merchandise Finance  **[0000764478-24-000010_bby-20240203x10k.htm:35]** .          |
| Jason Bonfig      | Senior Executive Vice President of Customer Offerings and Fulfillment    | 1999       | Jason Bonfig is the **Senior Executive Vice President of Customer Offerings and Fulfillment** at Best Buy. He oversees all elements of merchandising and product category management, supply chain, and marketing for Best Buy's core U.S. business. He also leads the company's Exclusive Brands private-label team. Mr. Bonfig has been with Best Buy since **1999**  **[0000764478-24-000010_bby-20240203x10k.htm:36]** **[0000764478-24-000010_bby-20240203x10k.htm:35]** .              |
| Damien Harmon     | Senior Executive Vice President of Customer, Channel Experiences & Enterprise Services | 2005       | Damien Harmon is the **Senior Executive Vice President of Customer, Channel Experiences & Enterprise Services** at Best Buy. He is responsible for the end-to-end customer experience, including stores and operations, in-home services and sales, virtual experiences, call centers, membership, and customer strategy. Mr. Harmon leads Geek Squad  **[0000764478-24-000010_bby-20240203x10k.htm:36]** **[0000764478-24-000010_bby-20240203x10k.htm:35]** .                              |
| Todd G. Hartman   | General Counsel and Chief Risk Officer                                   | 2006       | Todd G. Hartman was appointed as **General Counsel** in **2019** and has also served as **Chief Risk Officer** since **2017**. He is responsible for Best Buy's legal activities and its global risk and compliance program. Mr. Hartman joined Best Buy in **2006** and previously served as the company's deputy general counsel from **2011 to 2017**  **[0000764478-24-000010_bby-20240203x10k.htm:36]** **[0000764478-23-000006_bby-20230128x10k.htm:35]** .                           |
| Kamy Scarlett     | Senior Executive Vice President of Human Resources, Corporate Affairs and Canada | 2014       | Kamy Scarlett is the **Senior Executive Vice President of Human Resources, Corporate Affairs and Canada** at Best Buy. She joined Best Buy in **2014** as the senior vice president of retail and chief human resources officer for Best Buy Canada. In **2017**, she was appointed as the executive vice president of human resources  **[0000764478-24-000010_bby-20240203x10k.htm:37]** **[0000764478-24-000010_bby-20240203x10k.htm:35]** .                                          |
| Mathew R. Watson  | Senior Vice President, Controller and Chief Accounting Officer           | 2005       | Mathew R. Watson is the **Senior Vice President, Controller and Chief Accounting Officer** at Best Buy Co., Inc. He was appointed to this role in **2017**. Before this, he served as the Vice President, Controller and Chief Accounting Officer from **April 2015** until his current appointment. Mr. Watson joined Best Buy in **2005**  **[0000764478-24-000010_bby-20240203x10k.htm:37]** **[0000764478-23-000006_bby-20230128x10k.htm:36]** .                                     |

3fc9efc0b73d2d64d1faf12ac500204ad3c3030546d99432438760c02467f0bc

1. Given the expected slowdown in profit improvement from your services and membership categories next year, particularly as you have lapped the changes to your membership offerings, how do you plan to sustain growth and profitability in this segment?  **[BBY_3410030_13]** **[BBY_3410030_8]** 
2. With the anticipation that product margin rates will be a larger pressure in the fourth quarter compared to the third, can you elaborate on the specific factors contributing to this decline and how you intend to mitigate its impact on overall gross profit rates?  **[BBY_3410030_8]** **[BBY_3410030_7]** 
3. As you have increased advertising and technology expenses, resulting in higher SG&A dollars excluding the benefit from the extra week last year, how are you balancing these increased costs with the need to improve SG&A leverage amid softer revenue performance?  **[BBY_3410030_8]** **[BBY_3410030_7]** 
4. Considering the complexities and potential risks associated with tariffs and your sourcing exposure to China and Mexico, especially for the 2% to 3% of products where you are the importer of record, what specific strategies are you implementing to mitigate these risks and manage supply chain disruptions?  **[BBY_3410030_10]** 
5. In light of the highly promotional environment and inconsistencies in promotional effectiveness, how are you adjusting your pricing and promotional strategies to protect margins while ensuring you remain competitive and meet the value expectations of consumers?  **[BBY_3410030_11]** 

07e4a753dbb4a2c5ee1f1ec0384aeafa2b7b0f8db0388a84cb0c908e2b022760

f58cee2566075acd0e4331f99ba28d21c170bf42dc2ee3c5ee098648f48e9666

Domestic

- Computing and Mobile Phones

- Consumer Electronics

- Appliances

- Entertainment

- Services

- Other

International

Total Revenue

eb7d2d5c93ebb0371e03d833c70d8ba7cdbd3d7dd936956ec27032ab4a1fd51b

- Multi-channel retailers
- E-commerce businesses
- Technology service providers
- Traditional store-based retailers
- Vendors
- Mobile network carriers

These competitors are described as entities that offer products and services directly to customers, and some have lower cost operating structures, competing primarily on price  **[0000764478-24-000010_bby-20240203x10k.htm:6]** **[0000764478-24-000010_bby-20240203x10k.htm:14]** .

29b59c2b8d9f244ead73b7ffd4e17e75347be825568fa0060c66ecffbdff97e7

### Q3 2025 Earnings Call
- **Issued Period**: Q3 2025
- **Guided Period**: Q4 2025 and FY 2025
- **Guidance**:
  - **Q4 Comparable Sales Outlook**: Flat to a decline of 3%  **[BBY_3410030_6]** .
  - **Full Year Fiscal '25 Guidance**:
    - **Revenue**: $41.1 billion to $41.5 billion  **[BBY_3410030_8]** .
    - **Comparable Sales Decline**: 2.5% to 3.5%  **[BBY_3410030_8]** .
    - **Non-GAAP Operating Income Rate**: 4.1% to 4.2%  **[BBY_3410030_8]** .
    - **Non-GAAP Effective Income Tax Rate**: Approximately 23.5%  **[BBY_3410030_8]** .
    - **Non-GAAP Diluted Earnings Per Share**: $6.10 to $6.25  **[BBY_3410030_8]** .
    - **Gross Profit Rate**: Expected to expand by approximately 40 basis points compared to last year  **[BBY_3410030_8]** .
    - **Non-GAAP SG&A Dollars**: Expected to decline by over $200 million compared to last year  **[BBY_3410030_8]** .
  - **Q4 Non-GAAP Operating Income Rate**: 4.6% to 4.8%  **[BBY_3410030_7]** .
  - **Q4 Gross Profit Rate**: Expected to improve versus last year, but at a lesser degree than reported for the third quarter  **[BBY_3410030_7]** .

### Q2 2025 Earnings Call
- **Issued Period**: Q2 2025
- **Guided Period**: FY 2025
- **Guidance**:
  - **Annual Sales Guidance**: Decline of 1.5% to 3%  **[BBY_3400205_1]** .
  - **Earnings Per Share Guidance**: Raised due to better-than-expected results in the first half of the year  **[BBY_3400205_1]** .
  - **Comparable Sales for Q3**: Expected to be down approximately 1% versus last year  **[BBY_3400205_1]** .
  - **Non-GAAP Operating Income Rate for Q3**: Approximately 3.7%  **[BBY_3400205_8]** .
  - **Annual Gross Profit Rate**: Expected to expand approximately 35 basis points compared to last year  **[BBY_3400205_8]** .
  - **Annual SG&A Expectations**: Non-GAAP SG&A dollars expected to decline by approximately 2% compared to last year  **[BBY_3400205_8]** .
  - **Revenue for Fiscal Year 2025**: $41.3 billion to $41.9 billion  **[BBY_3400205_7]** .
  - **Non-GAAP Operating Income Rate for Fiscal Year 2025**: 4.1% to 4.2%  **[BBY_3400205_7]** .
  - **Non-GAAP Effective Income Tax Rate**: Approximately 24%  **[BBY_3400205_7]** .
  - **Non-GAAP Diluted Earnings Per Share for Fiscal Year 2025**: $6.10 to $6.35  **[BBY_3400205_7]** .
  - **Capital Expenditures for Fiscal Year 2025**: Approximately $750 million  **[BBY_3400205_4]** .
  - **Share Repurchases for Fiscal Year 2025**: Increased from $350 million to $500 million  **[BBY_3400205_5]** .

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  - **Enterprise Revenue**: $41.3 billion to $42.6 billion  **[BBY_3391174_9]** .
  - **Enterprise Comparable Sales**: Down 3% to flat  **[BBY_3391174_9]** .
  - **Enterprise Non-GAAP Operating Income Rate**: 3.9% to 4.1%  **[BBY_3391174_9]** .
  - **Non-GAAP Effective Income Tax Rate**: Approximately 25%  **[BBY_3391174_9]** .
  - **Non-GAAP Diluted Earnings Per Share**: $5.75 to $6.20  **[BBY_3391174_9]** .
  - **Capital Expenditures**: Approximately $750 million for fiscal '25  **[BBY_3391174_7]** .
  - **Share Repurchases**: Approximately $350 million  **[BBY_3391174_7]** .
  - **Annual Dividend Expense**: Approximately $800 million  **[BBY_3391174_7]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  - **Enterprise Revenue**: $41.3 billion to $42.6 billion  **[BBY_3375889_8]** .
  - **Enterprise Comparable Sales**: Down 3% to flat  **[BBY_3375889_8]** .
  - **Enterprise Non-GAAP Operating Income Rate**: 3.9% to 4.1%  **[BBY_3375889_8]** .
  - **Non-GAAP Effective Income Tax Rate**: Approximately 25%  **[BBY_3375889_8]** .
  - **Non-GAAP Diluted Earnings Per Share**: $5.75 to $6.20  **[BBY_3375889_8]** .
  - **Capital Expenditures**: $750 million to $800 million  **[BBY_3375889_8]** .
  - **Share Repurchases**: Approximately $350 million  **[BBY_3375889_8]** .
  - **Store Closures**: 10 to 15 stores in fiscal '25  **[BBY_3375889_8]** .
  - **Gross Profit Rate Expansion**: 20 to 30 basis points compared to fiscal '24  **[BBY_3375889_8]** .
  - **Best Buy Health Contribution**: Expected to add approximately 10 basis points to the gross profit rate on a year-over-year basis  **[BBY_3375889_8]** .

be4ad4d9df04819a9a308cf98835a34af4eb61a53609de7f37eef1ad29b04bc7

| Program Details          | Program 1        |
|--------------------------|------------------|
| Approval Date            | February 28, 2022  **[0000764478-24-000041_bby-20241102x10q.htm:31]** **[0000764478-24-000041_bby-20241102x10q.htm:23]**  |
| End Date/Duration        | No expiration date  **[0000764478-24-000041_bby-20241102x10q.htm:31]** **[0000764478-24-000041_bby-20241102x10q.htm:23]**  |
| Total additional amount  | **$5.0 billion**  **[0000764478-24-000041_bby-20241102x10q.htm:31]** **[0000764478-24-000041_bby-20241102x10q.htm:23]**  |
| Remaining authorization amount | **$3.5 billion** (as of November 2, 2024)  **[0000764478-24-000041_bby-20241102x10q.htm:11]**  |
| Details                  | Replaced previous $5.0 billion program authorized on February 16, 2021  **[0000764478-22-000017_bby-20220430x10q.htm:28]** **[0000764478-22-000037_bby-20220730x10q.htm:32]** **[0000764478-24-000022_bby-20240504x10q.htm:29]** **[0000764478-23-000025_bby-20230429x10q.htm:29]** **[0000764478-22-000037_bby-20220730x10q.htm:10]** **[0000764478-23-000006_bby-20230128x10k.htm:89]**  |

593e926635bfc8b73f82c4b5825ddce04c52db9d032167e4f2802baf6499cb2a

- U.S.

- Canada

- China

e59d2094062f41ce7cef08bc4d2c8caa39283440f2510c1e15a996c0769b131c

**Quarterly guidance for Q4 2025:**
- **Comparable Sales Outlook**: Flat to a decline of 3%  **[BBY_3410030_6]**  (no prior guidance)  
- **Non-GAAP Operating Income Rate**: 4.6% to 4.8%  **[BBY_3410030_7]**  (no prior guidance)  
- **Gross Profit Rate**: Expected to improve versus last year, but at a lesser degree than reported for the third quarter  **[BBY_3410030_7]**  (no prior guidance)  

**Annual guidance for FY 2025:**
- **Revenue**: $41.1B to $41.5B  **[BBY_3410030_8]**  (lowered from $41.3B to $41.9B  **[BBY_3400205_7]** )  
- **Comparable Sales Decline**: 2.5% to 3.5%  **[BBY_3410030_8]**  (lowered from 1.5% to 3%  **[BBY_3400205_1]** )  
- **Non-GAAP Operating Income Rate**: 4.1% to 4.2%  **[BBY_3410030_8]**  (no change from prior guidance  **[BBY_3400205_7]** )  
- **Non-GAAP Effective Income Tax Rate**: Approximately 23.5%  **[BBY_3410030_8]**  (lowered from approximately 24%  **[BBY_3400205_7]** )  
- **Non-GAAP Diluted Earnings Per Share**: $6.10 to $6.25  **[BBY_3410030_8]**  (lowered from $6.10 to $6.35  **[BBY_3400205_7]** )  
- **Gross Profit Rate**: Expected to expand by approximately 40 basis points compared to last year  **[BBY_3410030_8]**  (raised from approximately 35 basis points  **[BBY_3400205_8]** )  
- **Non-GAAP SG&A Dollars**: Expected to decline by over $200 million compared to last year  **[BBY_3410030_8]**  (raised from a ~2% decline  **[BBY_3400205_8]** )  

58c172f9badec2727c31e2751134dd8fa58d3998c3620ca8c4a1a4bd00e422c8

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 2005  **[0000764478-24-000010_bby-20240203x10k.htm:60]**    | Present  | Current auditor   |

47174d1bf7d2872e4b4ac170145b7bcb79646a1c8de782979fa0e22360088a9e

ddf61e17b93b6cd41ee057ac1a158de95275bc6b0174fd6cc8b793f66b9d2a5a

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $9,445 million (-3% YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:16]**   
- Domestic Segment: $8,697 million (-3% YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:11]**   
- International Segment: $748 million (-2% YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:11]**   
- Appliances (Domestic): $67 million (**-9%** YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:11]**   
- Entertainment (Domestic): $47 million (**-13%** YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:11]**   
- Other (Domestic): $7 million (**-22%** YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:11]** **[0000764478-24-000041_bby-20241102x10q.htm:11]**   
- Operating Income (EBIT): $35 million (**-90%** YoY)  **[0000764478-23-000053_bby-20231028x10q.htm:2]** **[0000764478-24-000041_bby-20241102x10q.htm:2]**   

6f3524a0fbe8b0adba64d199fa01d0b790b00f8c12a0553084828a45807b566b

e5d21856bc9a5488abd0a5db9ca1335a2c4cd4743eb12430956a479e6259ed62

b2112f522f4764fb2e0f31eee96bd77755330ce1474f581ff6e51ab62ca8afc2

| Year | Amount Due ($ in millions) | Debt Type       | Interest Rate (%) | % of Total Debt                     |
|------|----------------------------|-----------------|-------------------|-------------------------------------|
| 2028 | 500 **[0000764478-24-000041_bby-20241102x10q.htm:9]**                | Notes           | 4.45 **[0000764478-24-000041_bby-20241102x10q.htm:9]**     | 43.2% = (500 / 1156) * 100 **[0000764478-24-000041_bby-20241102x10q.htm:2]** **[0000764478-24-000041_bby-20241102x10q.htm:9]** |
| 2030 | 650 **[0000764478-24-000041_bby-20241102x10q.htm:9]**                | Notes           | 1.95 **[0000764478-24-000041_bby-20241102x10q.htm:9]**     | 56.2% = (650 / 1156) * 100 **[0000764478-24-000041_bby-20241102x10q.htm:2]** **[0000764478-24-000041_bby-20241102x10q.htm:9]** |

0bdd39cffeaa21f67b030b9b54f89ccad72f05b5bec4bc82c441a74b5867b9bd

a5d12921e82fba8fa269127319c35ad9107e7bc3e5d3c998d905b1e8fbce215b

- **Declining TV Sales and Prices:** Both TV units and average selling prices (ASPs) were down, indicating weakness in the TV category. This reflects a "very low price point, low tier type of environment" in TVs.  **[BBY_3391174_18]**
- **Increased Promotional Activity Pressuring Margins:** Best Buy expects more promotional activity across categories, notably in major appliances and TVs, which will lead to lower product margin rates than previously expected. This increased "pricing investments because of the promotionality" could impact overall profitability.  **[BBY_3391174_22]**
- **Potential Impact on Operating Leverage Due to Added Expenses:** As Best Buy plans to add expenses back in the second half to support growth as the industry turns, there is uncertainty about achieving operating leverage given how efficient the business is today, which could affect future profitability.  **[BBY_3391174_3]**

5c2832a16e5707a912fae56d577fd1824bb3f4feeb8b0a06846fd5d21ba20980

1. **Promotional Impact on Margins**  
   **Q:** Do you expect promotions to affect margins this year?  
   **A:** Management anticipates increased promotions will slightly lower product margin rates compared to initial expectations, driven by higher promotional activity across categories like appliances and TVs. This expectation is already included in their guidance, and they still feel the profit rate is trending toward the higher end of the original guide.  **[BBY_3391174_22]** 

2. **Appliance Market Share and Promotions**  
   **Q:** How is appliance market share affected by increased promotions?  
   **A:** In **Q1**, the appliance category was materially more promotional, and Best Buy likely lost share due to their targeted approach to promotions. As they move into **Q2**, **Q3**, and **Q4**, they are investing in pricing, marketing, and labor to support the category, aiming to strengthen their positioning while balancing revenue and profit.  **[BBY_3391174_11]** **[BBY_3391174_12]** **[BBY_3391174_13]** 

3. **AI-Enabled Laptops and Innovation**  
   **Q:** How are preorders and pricing of AI-enabled laptops impacting demand?  
   **A:** Preorders for AI-enabled laptops, though at premium price points above **$1,000**, are outpacing early expectations slightly. While not expecting mass adoption immediately, these innovations stimulate demand and interest, positioning Best Buy to capitalize on a forthcoming replacement cycle for computing devices about **4.5 years** post-pandemic.  **[BBY_3391174_14]** **[BBY_3391174_15]** **[BBY_3391174_21]** 

4. **May Sales Trends and Guidance**  
   **Q:** Are May-to-date sales trends better than the Q2 guidance?  
   **A:** May comparable sales are better than the **Q2** guidance, even without the full impact of Memorial Day. Improved trends in tablets, due to new launches and deals on older models, as well as positive impacts in appliances and TVs, support the positive trajectory in line with their thesis.  **[BBY_3391174_16]** 

5. **Operating Leverage on Industry Improvement**  
   **Q:** Can you achieve operating leverage as sales grow?  
   **A:** Management expects to continue improving efficiency and achieve operating rate expansion as the industry and sales grow, by making the right investments, driving efficiency, and progressing initiatives to bolster profitability.  **[BBY_3391174_13]** 

6. **Demographic Spending Trends**  
   **Q:** Are certain demographics driving spending on new AI PCs?  
   **A:** It's too early to assess demographic spending on AI PCs since they haven't launched yet. However, innovation across computing and tablets creates broad opportunities by making older generations more approachable at different price points, appealing to various customer segments.  **[BBY_3391174_21]** 

7. **Membership Program Growth**  
   **Q:** What's driving growth and margin improvement in the membership program?  
   **A:** The membership program grew to **7 million** paid members, up from **5.8 million**, with paid members showing higher interaction and spend. Improved gross profit rates, now slightly more than the expected **45 basis points** improvement, are driven by lower cost to serve and increased stand-alone warranty sales.  **[BBY_3391174_20]** 

8. **Unit Trends and ASPs**  
   **Q:** How are unit trends and ASPs in computing and TVs?  
   **A:** Unit trends in computing remain consistent, with potential for increased ASPs in the back half of the year due to new innovations. In TVs, both units and ASPs were down, navigating a low-price, low-tier environment. New AI capabilities may push ASPs slightly in laptops, but it's only part of the computing category.  **[BBY_3391174_17]** **[BBY_3391174_18]** 

9. **Services Growth Contribution**  
   **Q:** What is driving services revenue growth?  
   **A:** Services revenue growth, which increased by **9%**, is driven by charging for installation services previously included in the free membership. Since June last year, installations are charged separately, contributing to services growth, along with increased stand-alone warranty sales.  **[BBY_3391174_18]** 

10. **Store Refreshes vs. Remodels**  
    **Q:** Why choose store refreshes over remodels?  
    **A:** Store refreshes are less capital-intensive and allow Best Buy to update all **900** stores instead of remodeling only **30**. Refreshes can be executed quickly, often overnight, and enable collaboration with vendors to enhance in-store experiences, making the stores exciting and relevant across the entire chain.  **[BBY_3391174_16]** **[BBY_3391174_19]** 

11. **Incorporating AI for Efficiency**  
    **Q:** How does AI improve customer experience and costs?  
    **A:** Best Buy uses AI to enhance customer experience and drive engagement, such as personalized app homepages and refined customer reviews. AI also reduces costs by improving efficiency; for example, call summaries are automated, allowing agents to focus more on customers, resulting in quicker transactions and better service.  **[BBY_3391174_15]** 

12. **Timing and Cost of Store Refreshes**  
    **Q:** How quickly will store refreshes be executed and at what cost?  
    **A:** Store refreshes will be carried out throughout **Q2** and **Q3**, aiming for completion by the holiday season. Costs vary from **$50,000** to a few hundred thousand dollars per store, significantly less than a full remodel. Partners contribute to costs when updating their product presentations.  **[BBY_3391174_19]** 

113ee036078da637f90a2b905858aad7bb1b58abed495973b95c4c34c485f8cc

- **Expansion of store formats**, including outlets and smaller stores like the new Bosman and Kansas City locations, allows Best Buy to reach new markets, meet customer demand for value, and operate profitably.  **[BBY_3410030_15]**
- **Planned launch of a curated online marketplace in the U.S. targeting mid-next year**, leveraging their trusted brand to offer a wider assortment and engage customers in deeper categories, driving incremental revenue streams.  **[BBY_3410030_16]**
- **Strategic promotional activities and early start to the holiday season** position Best Buy well to capture consumer demand, maintain market share in key categories like computing, TVs, and appliances, and improve price perception.  **[BBY_3410030_11]** ,  **[BBY_3410030_20]**

1adc2bd083301b658708219b45726e0f3801d9f2147597a68813aaa6379f6be7

1. **Q4 Guidance and Factors**  
   **Q:** Explain Q4 comp outlook given strong start.  
   **A:** Management forecasts a flat to **down 3%** comp for Q4, despite a **5%** increase in the first three weeks, due to factors like a shorter holiday season, changes in promotional timing, and calendar shifts. They noted the first three weeks account for only about **20%** of Q4 sales and anticipate potential low points between sales events, especially in December.  **[BBY_3410030_9]** 

2. **Tariff Impact and Sourcing**  
   **Q:** What's your exposure to China and Mexico tariffs?  
   **A:** They confirmed that about **60%** of their cost of goods sold comes from China, consistent with prior periods. While they directly import only **2%-3%** of products, with most controlled manufacturing moved out of China, tariffs remain complex and could lead to higher prices for customers. They are collaborating with vendors on mitigation strategies, but diversification is challenging due to complex supply chains.  **[BBY_3410030_10]** **[BBY_3410030_20]** 

3. **Profit Improvement in Services**  
   **Q:** Are recent service improvements sustainable next year?  
   **A:** This year's gross profit expansion in services and membership was driven by program changes and cost reductions, benefits that will likely normalize next year. However, the warranty business is strong, with increasing attach rates potentially driving continued improvements. They expect services to remain healthy but not at this year's growth level.  **[BBY_3410030_13]** 

4. **Promotional Environment**  
   **Q:** How is the promotional environment affecting sales?  
   **A:** The company anticipates a highly promotional Q4, similar to the rest of the year, due to value-seeking consumers. They've invested in price and feel well-positioned but note inconsistencies in promotion effectiveness. Overall, promotions have improved price perception and sales during key periods.  **[BBY_3410030_11]** 

5. **Membership Renewals and Guidance**  
   **Q:** Any update on membership renewals and wide Q4 OI guidance?  
   **A:** Membership retention rates are outperforming internal expectations for both Total and Plus tiers, with paid members showing higher engagement and spend. While not disclosing specific rates, they are pleased with the metrics. The wide Q4 operating income guidance reflects potential SG&A deleverage at varying comp levels.  **[BBY_3410030_16]** 

6. **Laptop Sales and AI**  
   **Q:** What's driving laptop sales and AI's impact?  
   **A:** Laptops achieved a **7%** comp increase, the highest since April 2021. While AI features are expanding, with **50%** of premium Windows laptops including AI capabilities, current sales are mainly driven by the upgrade and replacement cycle. Interest in AI is expected to grow, particularly with Windows 10 support ending in October 2025.  **[BBY_3410030_17]** 

7. **Mobile Phones Performance**  
   **Q:** How are mobile phones and AI models performing?  
   **A:** Mobile phone trends improved slightly in Q3 over Q2 but remain down year-over-year. The impact of AI-optimized models like the iPhone 16 is not fully realized, as much innovation is forthcoming. There's rising customer interest in phones evolving into virtual assistants and a shift towards purchasing unlocked premium phones.  **[BBY_3410030_12]** 

8. **New Store Formats**  
   **Q:** How are new store formats performing?  
   **A:** They are exploring new store formats, including expanding outlets and opening smaller stores in markets like Bosman and Kansas City. Early community response has been positive, but it's too soon for performance insights. They aim to serve markets effectively by adapting store sizes and formats.  **[BBY_3410030_14]** 

9. **Marketplace Opportunity**  
   **Q:** What's the opportunity with the upcoming marketplace?  
   **A:** Best Buy plans to launch a curated marketplace to offer deeper assortments tailored to their customers. This strategy leverages increased digital shopping behaviors and allows them to meet customer needs without stocking every item in-store. They are focused on integrating the marketplace seamlessly with in-store and digital experiences.  **[BBY_3410030_14]** 

10. **Best Buy Express Profitability**  
    **Q:** How profitable is Best Buy Express internationally?  
    **A:** Currently, Best Buy Express contributes neutral profitability due to ramp-up costs, but they expect improved earnings next year as the locations mature and sales increase.  **[BBY_3410030_13]** 

db9636d9812cf6f9605098b1e74eea49a1092990f8d55d00a2fc2d5db1444211

- Despite multiple strategic pivots, **Best Buy's domestic sales are on pace to be about $2 billion below where they were in 2019**, suggesting challenges in driving sales growth and potential loss of market share.  **[BBY_3375889_14]**
- **Pressures on average selling prices (ASPs)** and reliance on promotions indicate an uncertain balance between **traffic versus ticket**, which could impact margins and profitability.  **[BBY_3375889_18]**
- Changes in membership benefits have shifted services revenue growth towards increased installation revenue rather than membership fees, potentially **reducing the perceived value of memberships** and affecting customer loyalty.  **[BBY_3375889_20]**

d571cd3d20d8f77faf4d864d2083b5655843aef8c8f546cbf6e0c9ebecce39dc

1. **Guidance Reduction**  
   **Q:** Why did you lower comp guidance despite better Q2 and flat August?  
   **A:** The consumer environment remains unpredictable and uneven, and we anticipate potential impacts from the upcoming election and holiday season, which could lead to unsettled consumer behavior.  **[BBY_3400205_10]** 

2. **Market Share Stabilization**  
   **Q:** Is your market share stabilizing, and how will profitability be influenced as sales rebound?  
   **A:** Yes, we perceive rough stabilization in market share, particularly in categories like computing and gaming. While some areas like major appliances remain challenging due to high promotion, we expect to expand ROI over time through cost reductions and efficiency improvements as the industry grows.  **[BBY_3400205_11]** 

3. **Impact of Innovation**  
   **Q:** What is the next product cycle that will drive improvement?  
   **A:** We see innovation in laptops and tablets, with new devices matching premium laptops in processing power and price. AI capabilities are expected to proliferate across devices with screens, starting with computing, and this evolution will drive demand for higher processing power devices over a longer cycle.  **[BBY_3400205_12]** 

4. **Membership Program Performance**  
   **Q:** How is the membership program developing and affecting consumer behavior?  
   **A:** The program aims to drive customer engagement and increase share of wallet. We continue to grow new paid customers year-over-year, and paid members show higher engagement and spend at Best Buy. Retention rates are outperforming expectations, indicating early success in the program's goals.  **[BBY_3400205_14]** 

5. **Promotional Environment**  
   **Q:** Will the promotional environment in appliances and other categories get better or worse?  
   **A:** We expect the high level of promotional activity seen in Q1 and Q2 to continue throughout the year across many categories, including appliances, televisions, and computing. Our guidance reflects the need to remain competitive in this environment.  **[BBY_3400205_15]** 

6. **Gross Margin Outlook**  
   **Q:** Can you provide more texture on gross margin between Q3 and Q4?  
   **A:** The gross profit rate expansion for Q3 and Q4 is similar but likely a bit lower than the first half of the year due to factors like product margin pressure and credit card profit share. For the full year, we expect approximately **35 basis points** of gross profit rate expansion.  **[BBY_3400205_20]** 

7. **Back-to-School and Q4 Outlook**  
   **Q:** How is back-to-school performing, and what factors affect your Q4 outlook?  
   **A:** Back-to-school is performing in line with expectations, with the season extending into September. For Q4, factors like continued strength in computing and tablets, price investments, increased marketing, and ramped-up labor in key areas could drive performance toward the high end of our guidance range of **down 3% to up 2%**.  **[BBY_3400205_16]** 

8. **Potential for ASP Increases**  
   **Q:** Is there potential for average selling prices to increase in tablets and computers?  
   **A:** In early stages of innovation, higher ASPs are typical. While AI-enabled computers may drive price points up, we operate in a highly promotional, price-sensitive environment, so our objective is meeting customer needs across the full product range rather than focusing on ASP expansion.  **[BBY_3400205_17]** 

9. **Wallet Cannibalization and Industry Share**  
   **Q:** Do you see innovation leading to net incremental spend or wallet cannibalization in the CE industry?  
   **A:** Several pressures have impacted industry growth, including inflation, spend on experiences, and a stagnant housing market. However, with innovation proliferating and approaching replacement cycle timing post-pandemic, we are optimistic that the industry will rebound and regain share of total consumer spend.  **[BBY_3400205_18]** 

1e65ee620614e6c5437b40dc57c7b8ade7525687a8e489d7a3cdf343fdb8055b

- **Best Buy expects sequential improvement in comparable sales performance**, with May comparable sales better than Q2 guidance.  **[BBY_3391174_3]** **[BBY_3391174_16]**
- **Upcoming launches of AI PCs and other new products are expected to drive growth in the computing category**, with Best Buy having the largest assortment at launch, including over 40% retail exclusives.  **[BBY_3391174_3]** **[BBY_3391174_21]**
- **Membership program is driving higher customer engagement and spend, improving gross profit rate**, with paid members increasing to 7 million and gross profit rate expected to improve by over 45 basis points.  **[BBY_3391174_20]**

c7a31e54c7304ffa75259d68944fb392ec4fd81076d669c2fbd2a63a4cea8581

- **Best Buy's paid membership grew to 7 million members**, up from 5.8 million at the start of the year, with a **35% increase in paid memberships in Q4** compared to last year. Paid members interact with the brand more frequently and shift their share of wallet to Best Buy.  **[BBY_3375889_20]**
- The company is investing in store refreshes and vendor partnerships to enhance customer experiences, aiming to make stores more vibrant and exciting, which could drive sales growth.  **[BBY_3375889_22]**
- Early signs of product replacement cycles are emerging, with **laptop units returning to growth in Q4** and this trend continuing into Q1, indicating potential for increased sales as customers upgrade their technology.  **[BBY_3375889_10]**

3aa714d4ec3892411c90d194eb157ff17c6b2ac1cd976523684157406cd197c2

- **Intense promotional environment expected to continue**, particularly in key categories like appliances, televisions, and computing, which may pressure margins and profitability.  **[BBY_3400205_15]**
- **Gross profit rate expansion will be lower in the second half of the year**, due to lapping of prior benefits, product margin pressure, and reduced credit card profit share, potentially impacting earnings growth.  **[BBY_3400205_8]** **[BBY_3400205_20]**
- **Consumer environment remains unpredictable and uneven**, with potential risks from election impacts and holiday season behavior, possibly leading to unsettled consumer spending in the back half of the year.  **[BBY_3400205_10]**

9c5872f165adf0d69fd6dcd3cc946bee8fbed90d2e6de5c402078f87a34417c6

1. **Market Share Trends**  
   **Q:** How are strategic changes impacting Best Buy's market share?  
   **A:** Corie Barry stated that despite strategic pivots intended to bolster their market position and meet changing consumer expectations, Best Buy has largely held market share in key categories since the pandemic. For categories representing about **70% of revenue**, they held share in Q4 and the full year. The changes focus on owning the home and CE experience end-to-end for consumers.  **[BBY_3375889_14]** 

2. **Sales Outlook and Housing Market**  
   **Q:** What role does housing play in your sales outlook improvement?  
   **A:** Corie Barry acknowledged that while housing doesn't perfectly correlate with their business, areas like appliances and televisions are highly correlated. At the high end of their guidance (flat comp for the year), they assume some macro pressures start to abate, including inflation pulling back and seeing **"green shoots"** in the housing market. They anticipate gradual improvement that may buoy parts of the business.  **[BBY_3375889_16]** 

3. **Operating Margin Leverage**  
   **Q:** How should we model sales growth versus operating margin leverage?  
   **A:** Matthew Bilunas expects that as the industry grows in future years, Best Buy will grow sales and expand operating profit rate accordingly. The company aims to leverage SG&A through cost control and efficiency initiatives. While not providing specific rate improvements per comp point, they anticipate that growing sales by a few percentage points will allow for rate expansion.  **[BBY_3375889_15]** 

4. **Membership and Services Growth**  
   **Q:** Can you update us on membership numbers and services revenue?  
   **A:** Best Buy now has **7 million members**, up from **5.8 million** at the start of the year, with a **35%** increase in paid member sign-ups in Q4 compared to last year. The introduction of **My Best Buy Plus** has driven growth. Paid members interact with the brand more frequently and are shifting their share of wallet to Best Buy. Services revenue grew **6%** in Q4, driven by increased revenue from installation services after changes to the membership program.  **[BBY_3375889_20]** 

5. **Online Sales and Store Footprint**  
   **Q:** How is online growth affecting consumer behavior and store plans?  
   **A:** Online penetration has stabilized after pandemic highs and is expected to continue increasing at a normalized pace. **44%** of online sales are still picked up in-store, consistent year-over-year. Best Buy sees an important interplay between digital and physical channels and is methodically evolving its store footprint, focusing on enhancing the in-store shopping experience while considering the right long-term portfolio.  **[BBY_3375889_17]** 

6. **Advertising Expense Increase**  
   **Q:** Why is marketing expense increasing by $50 million this year?  
   **A:** Matthew Bilunas explained that the **$50 million** increase in advertising expense is due to a brand relaunch in the back half of the year, inflation in marketing costs from events like the Olympics and presidential election, and efforts to ensure proper marketing spend in key categories. Corie Barry added that their **Best Buy Ads** business is growing, leveraging customer data to deliver value to vendor partners through personalized advertising and partnerships with platforms like Amazon Fire TV and Roku.  **[BBY_3375889_21]** 

7. **AI Products and Innovation**  
   **Q:** What is the outlook for AI products in consumer electronics?  
   **A:** Corie Barry noted increasing excitement around AI's impact on consumer electronics, highlighted at the **Consumer Electronics Show in January**. She anticipates that in the coming year, AI will make tools easier and more seamless, and will make CE products more human and interactive. While not expecting a revolution overnight, she sees a vibrant innovation horizon for AI technology enhancing products' integration into users' lives.  **[BBY_3375889_12]** 

8. **Comp Performance Drivers**  
   **Q:** How do you segment comp decline between macro pressures and pandemic pull-forward?  
   **A:** Corie Barry mentioned early indicators of entering a replacement cycle, such as **laptop units returning to growth in Q4** and continuing into Q1. While there's not massive innovation currently driving purchases, more is expected as the year progresses. The overhang is due to macro factors that continue to weigh on the industry and haven't abated as quickly as expected.  **[BBY_3375889_10]** 

9. **Traffic vs. Ticket in Comp Guidance**  
   **Q:** How should we think about traffic versus ticket in your comp range guidance?  
   **A:** Matthew Bilunas observed that average selling prices were pressured early last year but stabilized in Q3 and Q4, with ASPs **up** compared to last year. For next year, they aim for ASP stabilization and unit growth, stimulating units through promotions. Performance may vary by category, with some quarters seeing ASP pressure and others driven by units, similar to last year.  **[BBY_3375889_18]** 

10. **Credit Card Usage Trends**  
    **Q:** Have you seen any changes in credit card usage patterns?  
    **A:** Matthew Bilunas reported no significant changes in credit card usage. Approximately **25%** of sales are transacted on their card, consistent over the past five years. Card use for external purchases has been growing, indicating continued engagement with the credit program.  **[BBY_3375889_19]** 

a9c60285f1ad8495ddfef2bf7b0fd34af16c121e590254f94b1d4d1481506d66

- *1. Growth in Membership Program Driving Higher Customer Engagement and Spend:** Best Buy's paid membership program continues to grow, with **new paid customers increasing year-over-year in Q2**. Paid members show higher levels of engagement and spend at Best Buy, and **retention rates are outperforming expectations**.  **[BBY_3400205_14]**
- *2. Strong Performance in Computing and Tablets with Positive Outlook:** The company reported that **computing and tablet comparable sales grew by 6%** in Q2, driven by innovation and customers' desire to replace or upgrade products. Best Buy expects **AI-inspired capabilities and innovation to continue to spread across categories and devices over the next few years**, fueling customer demand.  **[BBY_3400205_12]** **[BBY_3400205_16]**
- *3. Positive Expectations for Second Half with Focus on Key Categories:** Best Buy anticipates improvements in categories like **televisions and appliances** in the back half of the year, supported by **increased marketing investments and dedicated labor**. The company is planning for better trends in Q3 and Q4, with expectations that these categories will help drive sales growth.  **[BBY_3400205_16]**

411d05ca5c00d2cdc8c8f552d618b05abd41cfa846fb57bc22b63d2b11ff9c2e

- **Despite increased promotional efforts, Best Buy is struggling to stimulate consumer demand, particularly during periods between sales events, as customers remain deal-focused and less responsive to promotions.**  **[BBY_3410030_20]**
- **Potential tariffs on imports from China could significantly impact Best Buy's cost of goods sold, as approximately 60% of their COGS comes from China, and the company faces challenges diversifying its supply chain.**  **[BBY_3410030_20]**
- **Uncertainty surrounds Best Buy's new store formats and marketplace launch, as these initiatives are in early stages with limited consumer response data, posing execution risks and potential delays in realizing benefits.**  **[BBY_3410030_16]** **[BBY_3410030_15]**

150ae406eadbe1cdfd4283df1fb9c6e27e4d95ea975431c60e6da92847eb32c8

Best Buy Co Inc (BBY)

Financials