See details at: https://investors.bestbuy.com/investor-relations/news-and-events/financial-releases/news-details/2023/Best-Buy-Reports-First-Quarter-Results/default.aspx
For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.
'Today we are reporting Q1 sales results that are right in line with the expectations we shared in March and profitability that was better than expected, demonstrating our strong operational execution,' said
'In this environment, customers are clearly feeling cautious and making tradeoff decisions as they continue to deal with high inflation and low consumer confidence due to a number of factors,' continued Barry. 'At the same time, in the first quarter, we continued to see our purchasing customer behavior remain relatively consistent in terms of demographics and the percentage of purchases categorized as premium. In addition, our focus on being there for our customers with expertise and support was highlighted by material improvements in customer satisfaction scores for our in-home services and delivery, and record scores in remote support, in-home repair, store care, and
FY24 Financial Guidance
'Our sales performance in the first quarter aligned with our expectations and we are maintaining the full year guidance we provided this past March,' said
'As we enter the second quarter, we expect our comparable sales to decline in the range of 6% to 8% and our non-GAAP operating income rate to be approximately 3% or slightly higher,' Bilunas continued. 'Given the current environment, we are of course preparing for a number of scenarios within our annual guidance range. At this point, we believe our sales align closer to the midpoint of the annual comparable sales guidance. It is still early in the year, so we will continue to watch the trends closely and adjust as necessary.'
Revenue of
Comparable sales decline of 3.0% to 6.0%
Enterprise non-GAAP operating income rate2 of 3.7% to 4.1%
Non-GAAP effective income tax rate2 of approximately 24.5%
Non-GAAP diluted EPS2 of
Capital expenditures of approximately
Note: Incorporated in the above guidance, the 53rd week is expected to add approximately
Domestic Segment Q1 FY24 Results
Domestic Revenue
Domestic revenue of
From a merchandising perspective, the largest drivers of the comparable sales decline on a weighted basis were computing, appliances, home theater and mobile phones. These drivers were partially offset by growth in the gaming and services categories.
Domestic online revenue of
Domestic Gross Profit Rate
Domestic gross profit rate was 22.6% versus 21.9% last year. The higher gross profit rate was primarily due to: (1) improved financial performance from the company's membership offerings, which included higher services margin rates and reduced costs associated with program changes made to the company's free membership offering; (2) favorable product margin rates; and (3) the profit-sharing revenue from the company's private label and co-branded credit card arrangement.
Domestic Selling, General and Administrative Expenses ('SG&A')
Domestic GAAP SG&A was
International Segment Q1 FY24 Results
International Revenue
International revenue of
International Gross Profit Rate
International gross profit rate was 23.7% versus 24.3% last year. The lower gross profit rate was primarily driven by a lower mix of revenue from the higher margin rate services category.
International SG&A
International SG&A was
Share Repurchases and Dividends
In Q1 FY24, the company returned a total of
Today, the company announced its board of directors has authorized the payment of a regular quarterly cash dividend of
Conference Call
Notes:
(1) The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as other retailers' methods. For additional information on comparable sales, please see our most recent Annual Report on Form 10-K, and our subsequent Quarterly Reports on Form 10-Q, filed with theSecurities and Exchange Commission ('SEC '), and available at www.investors.bestbuy.com.
(2) A reconciliation of the projected non-GAAP operating income rate, non-GAAP effective income tax rate and non-GAAP diluted EPS, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measures, is not provided because the company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as restructuring charges; price-fixing settlements; goodwill impairments; gains and losses on investments; intangible asset amortization; certain acquisition-related costs; and the tax effect of all such items. Historically, the company has excluded these items from non-GAAP financial measures. The company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, 'non-GAAP adjustments'). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business or reaching settlement of a legal dispute, are inherently unpredictable as to if or when they may occur. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
Forward-Looking and Cautionary Statements:
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements reflect management's current views and estimates regarding future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as 'anticipate,' 'appear,' 'approximate,' 'assume,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'foresee,' 'guidance,' 'intend,' 'may,' 'might,' 'outlook,' 'plan,' 'possible,' 'project' 'seek,' 'should,' 'would,' and other words and terms of similar meaning or the negatives thereof. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, our operating model, new strategies and growth initiatives, the competitive environment, consumer behavior and other events. These statements involve a number of judgments and are subject to certain risks and uncertainties, many of which are outside the control of the Company, that could cause actual results to differ materially from the potential results discussed in such forward-looking statements. Readers should review Item 1A, Risk Factors, of our most recent Annual Report on Form 10-K, and any updated information in subsequent Quarterly Reports on Form 10-Q, for a description of important factors that could cause our actual results to differ materially from those contemplated by the forward-looking statements made in this release. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: macroeconomic pressures in the markets in which we operate (including but not limited to the effects of COVID-19, recession, inflation rates, fluctuations in foreign currency exchange rates, limitations on a government's ability to borrow and/or spend capital, fluctuations in housing prices, energy markets, and jobless rates and effects related to the conflict in
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
($ and shares in millions, except per share amounts)
(Unaudited and subject to reclassification)
Income statement accounts represent the activity for the trailing 12 months ended as of each of the balance sheet dates. Balance sheet accounts represent the average account balances for the trailing 12 months ended as of each of the balance sheet dates.
(2)
Non-GAAP operating income adjustments include continuing operations adjustments for restructuring charges, intangible asset amortization and acquisition-related transaction costs. Additional details regarding these adjustments are included in the Reconciliation of Non-GAAP Financial Measures schedule within the company's earnings releases.
(3)
Operating lease interest represents the add-back to operating income to approximate the total interest expense that the company would incur if its operating leases were owned and financed by debt. The add-back is approximated by multiplying average operating lease assets by 4%, which approximates the interest rate on the company's operating lease liabilities.
(4)
Income taxes are approximated by using a blended statutory rate at the Enterprise level based on statutory rates from the countries in which the company does business, which primarily consists of the
(5)
Operating lease amortization represents operating lease cost less operating lease interest. Operating lease cost includes short-term leases, which are immaterial, and excludes variable lease costs as these costs are not included in the operating lease asset balance.
(6)
Excess cash represents the amount of cash, cash equivalents and short-term investments greater than
(7)
Accumulated depreciation and amortization represents accumulated depreciation related to property and equipment and accumulated amortization related to definite-lived intangible assets.
(8)
Adjusted current liabilities represent total current liabilities less short-term debt and the current portions of operating lease liabilities and long-term debt.
Investor Contact:
mollie.obrien@bestbuy.com
Media Contact:
carly.charlson@bestbuy.com
Source:
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