19th Ave New York, NY 95822, USA

Best Buy reports Q2 FY23 results

Comparable Sales Declined 12.1% Compared to 19.6% Growth in Q2 FY22

GAAP Diluted EPS of $1.35

Non-GAAP Diluted EPS of $1.54

MINNEAPOLIS, August 30, 2022 — Best Buy Co., Inc. (NYSE: BBY) today announced results for the 13-week second quarter ended July 30, 2022 (“Q2 FY23”), as compared to the 13-week second quarter ended July 31, 2021 (“Q2 FY22”).

Click here to view full release and statements.

  Q2 FY23  Q2 FY22
Revenue ($ in millions)
Domestic segment$9,569$11,011
International segment$760$838
Enterprise comparable sales % change1(12.1)%19.6%
Domestic comparable sales % change1(12.7)%20.8%
Domestic comparable online sales % change1(14.7)%(28.1)%
International comparable sales % change1(4.2)%5.0%
Operating Income  
GAAP operating income as a % of revenue3.6%6.7%
Non-GAAP operating income as a % of revenue4.1%6.9%
Diluted Earnings per Share (“EPS”)  
GAAP diluted EPS$1.35$2.90
Non-GAAP diluted EPS$1.54$2.98

For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.

“I am incredibly proud of our teams as they continue to rise to the challenges of the past few years and I remain impressed with their ability to lead through the rapidly shifting business environment,” said Corie Barry, Best Buy CEO. “Our comparable sales were down 12.1% as we lapped strong comparable sales growth last year of 19.6%. Our online sales penetration, at 31% of our total Domestic sales, is almost twice as high as pre-pandemic Q2 FY20 while our diluted EPS grew over 40% versus Q2 FY20.”

“We are clearly operating in an uneven sales environment,” continued Barry. “As we entered the year, we expected the consumer electronics industry to be softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by stimulus dollars. The macro environment has been more challenged due to several factors and that has put additional pressure on our industry.”

Barry continued, “We are focused on balancing our near-term response to difficult conditions and managing well what is in our control, while also delivering on our strategic initiatives and what will be important for our long-term growth. This includes actively assessing further actions to evolve our operating model, manage profitability and iterate on our growth initiatives. Our strategy, and our confidence in it, remains unchanged. We have exciting opportunities ahead of us in a world that is more reliant on technology than ever. We are a financially strong company with a resilient, world class team that will successfully navigate the current environment.”

FY23 Financial Guidance

Matt Bilunas, Best Buy CFO, said, “Our current FY23 planning assumptions for a comparable sales1 decline in a range around 11% and a non-GAAP operating income rate2 of approximately 4% are consistent with the update we provided in late July.”

Bilunas continued, “As it relates specifically to Q3 FY23, we anticipate that our comparable sales will decline slightly more than the 12.1% decline we reported for the second quarter. We anticipate the year-over-year decline in our non-GAAP operating income rate in Q3 FY23 will be very similar to, or slightly more than, our Q2 FY23 year-over-year results.”

Domestic Segment Q2 FY23 Results

Domestic Revenue

Domestic revenue of $9.57 billion decreased 13.1% versus last year primarily driven by a comparable sales decline of 12.7%.

From a merchandising perspective, the company had comparable sales declines across almost all categories, with the largest drivers on a weighted basis being computing and home theater.  

Domestic online revenue of $2.97 billion decreased 14.7% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was 31.0% versus 31.7% last year. 

Domestic Gross Profit Rate

Domestic gross profit rate was 22.0% versus 23.7% last year. The lower gross profit rate was primarily due to: (1) lower services margin rates, including pressure associated with the Best Buy Totaltech membership offering; (2) lower product margin rates, including increased promotions; and (3) higher supply chain costs. These pressures were partially offset by higher 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 $1.73 billion, or 18.1% of revenue, versus $1.85 billion, or 16.8% of revenue, last year. On a non-GAAP basis, SG&A was $1.71 billion, or 17.9% of revenue, versus $1.83 billion, or 16.6% of revenue, last year. Both GAAP and non-GAAP SG&A decreased primarily due to lower incentive compensation.

International Segment Q2 FY23 Results

International Revenue

International revenue of $760 million decreased 9.3% versus last year. This decrease was primarily driven by a comparable sales decline of 4.2% in Canada and the negative impact of approximately 420 basis points from foreign currency exchange rates.

International Gross Profit Rate

International gross profit rate was 23.4% versus 24.3% last year. The lower gross profit rate was primarily driven by lower product margin rates.

International SG&A

International SG&A was $150 million, or 19.7% of revenue, versus $160 million, or 19.1% of revenue, last year. SG&A decreased primarily due to lower incentive compensation and the favorable impact of foreign currency exchange rates, which were partially offset by higher store payroll expense.

Restructuring Charges

In light of ongoing changes in business trends, during Q2 FY23 the company commenced an enterprise-wide restructuring initiative to better align its spending with critical strategies and operations, as well as to optimize its cost structure. The company incurred $34 million of such restructuring costs in Q2 FY23, primarily related to termination benefits. The company currently expects to incur additional charges through the remainder of FY23 for this initiative. Consistent with prior practice, restructuring costs related to this initiative are excluded from the company’s non-GAAP results.

Income Taxes

The Q2 FY23 GAAP effective tax rate was 15.6% versus 8.0% last year. On a non-GAAP basis, the effective tax rate was 16.7% versus 8.4% last year. The lower GAAP and non-GAAP effective tax rates last year were primarily due to a multi-jurisdiction, multi-year non-cash benefit from the resolution of certain discrete tax matters.

Share Repurchases and Dividends

In Q2 FY23, the company returned a total of $208 million to shareholders through share repurchases of $10 million and dividends of $198 million. On a year-to-date basis, the company has returned a total of $862 million to shareholders through share repurchases of $465 million and dividends of $397 million. The company paused share repurchases during Q2 FY23.

Today, the company announced its board of directors has authorized the payment of its regular quarterly cash dividend of $0.88 per common share. The quarterly dividend is payable on October 11, 2022, to shareholders of record as of the close of business on September 20, 2022.

Conference Call

Best Buy is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on August 30, 2022. A webcast of the call is expected to be available at www.investors.bestbuy.com, both live and after the call.


(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 the Securities and Exchange Commission (“SEC”), and available at www.investors.bestbuy.com.

(2) A reconciliation of the projected non-GAAP operating income and non-GAAP operating income rate, 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 that reflect management’s current views and estimates regarding future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “guidance,” “intend,” “outlook,” “plan,” “project” and other words and terms of similar meaning. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment and other events. These statements are subject to certain risks and uncertainties 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 Annual Report on Form 10-K for the fiscal year ended January 29, 2022, 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: the duration and scope of the COVID-19 pandemic and its resurgences and the impact on demand for our products and services; levels of consumer confidence; supply chain issues; any material disruption in our relationship with or the services of third-party vendors, risks related to our exclusive brand products and risks associated with vendors that source products outside of the U.S.; macroeconomic pressures in the markets in which we operate (including but not limited to the effects of COVID-19, increased levels of inventory loss due to organized crime, petty theft or otherwise, fluctuations in housing prices, energy markets, and jobless rates and those related to the conflict in Ukraine); future outbreaks, catastrophic events, health crises and pandemics; susceptibility of our products to technological advancements, product life cycles and launches; conditions in the industries and categories in which we operate; changes in consumer preferences, spending and debt; competition (including from multi-channel retailers, e-commerce business, technology service providers, traditional store-based retailers, vendors and mobile network carriers); our ability to attract and retain qualified employees; changes in market compensation rates; our expansion strategies; our focus on services as a strategic priority; our reliance on key vendors and mobile network carriers (including product availability); our ability to maintain positive brand perception and recognition; our company transformation; our mix of products and services; our ability to effectively manage strategic ventures, alliances or acquisitions; our ability to effectively manage our real estate portfolio; trade restrictions or changes in the costs of imports (including existing or new tariffs or duties and changes in the amount of any such tariffs or duties); our reliance on our information technology systems; our dependence on internet and telecommunications access and capabilities; our ability to prevent or effectively respond to a cyber-attack, privacy or security breach; product safety and quality concerns; changes to labor or employment laws or regulations; risks arising from statutory, regulatory and legal developments (including tax statutes and regulations); risks arising from our international activities (including those related to the conflict in Ukraine); failure to effectively manage our costs; our dependence on cash flows and net earnings generated during the fourth fiscal quarter; pricing investments and promotional activity; economic or regulatory developments that might affect our ability to provide attractive promotional financing; constraints in the capital markets; changes to our vendor credit terms; changes in our credit ratings; and general economic uncertainty in key global markets and worsening of global economic conditions or low levels of economic growth. We caution that the foregoing list of important factors is not complete. Any forward-looking statements speak only as of the date they are made and we assume no obligation to update any forward-looking statement that we may make.

Investor Contact:  Media Contact:
Mollie O’Brien  Carly Charlson
mollie.obrien@bestbuy.com  carly.charlson@bestbuy.com