Stock Analysis on Net
Stock Analysis on Net

Best Buy Co. Inc. (NYSE:BBY)

This company has been moved to the archive! The financial data has not been updated since December 6, 2022.

Common-Size Income Statement 

Best Buy Co. Inc., common-size consolidated income statement

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12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Revenue 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -77.51 -77.63 -76.97 -76.77 -76.57 -76.04
Gross profit 22.49% 22.37% 23.03% 23.23% 23.43% 23.96%
Selling, general and administrative expenses -16.68 -16.77 -18.33 -18.69 -19.03 -19.15
Restructuring charges 0.07 -0.54 -0.09 -0.11 -0.02 -0.10
Operating income 5.87% 5.06% 4.60% 4.43% 4.37% 4.71%
Gain on sale of investments 0.00 0.00 0.00 0.03 0.00 0.01
Investment income and other 0.02 0.08 0.11 0.11 0.11 0.08
Interest expense -0.05 -0.11 -0.15 -0.17 -0.18 -0.18
Other income (expense) -0.03% -0.03% -0.04% -0.03% -0.06% -0.10%
Earnings before income tax expense and equity in income of affiliates 5.84% 5.03% 4.57% 4.40% 4.31% 4.61%
Income tax expense -1.11 -1.23 -1.04 -0.99 -1.94 -1.55
Equity in income of affiliates 0.01 0.00 0.00 0.00 0.00 0.00
Net earnings from continuing operations 4.74% 3.80% 3.53% 3.41% 2.37% 3.06%
Gain from discontinued operations, net of tax 0.00 0.00 0.00 0.00 0.00 0.05
Net earnings 4.74% 3.80% 3.53% 3.41% 2.37% 3.12%

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

The financial data reveals several significant trends in the company's profitability and cost management over the six-year period from 2017 to 2022.

Revenue and Cost of Sales
Revenue consistently represents 100% of the base measure, serving as a reference point for all other items. The cost of sales gradually increased as a percentage of revenue, moving from -76.04% in 2017 to a peak of -77.63% in 2021 before slightly decreasing to -77.51% in 2022. This indicates a rising cost base relative to revenue, which negatively impacted gross profit margins.
Gross Profit
Gross profit showed a continuous decline as a percentage of revenue, decreasing from 23.96% in 2017 to 22.37% in 2021, followed by a marginal uptick to 22.49% in 2022. This downward trend reflects increasing costs or potentially decreasing pricing power over the years.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses as a percentage of revenue steadily decreased from -19.15% in 2017 to -16.68% in 2022. This reduction suggests improved operational efficiency or cost control in administrative and selling functions, partially offsetting margin compression at the gross profit level.
Restructuring Charges
Restructuring charges were low and relatively stable from 2017 through 2020 but showed a marked increase to -0.54% in 2021, followed by a positive 0.07% in 2022. The 2021 peak indicates a significant restructuring effort, while the positive figure in 2022 may reflect reversals or recoveries related to prior periods.
Operating Income
Operating income exhibited an improving trend, rising from 4.71% of revenue in 2017 to 5.87% in 2022. This improvement corresponds with declining SG&A expenses and, despite margin pressure in gross profit, highlights effective operating leverage and overall expense management.
Non-Operating Income and Expenses
Items such as gain on sale of investments, investment income, interest expense, and other income/expense remained relatively minor in magnitude and showed limited volatility. Interest expense notably declined from -0.18% to -0.05% of revenue, indicating reduced financing costs or lower debt levels.
Earnings Before Income Tax (EBT)
EBT followed the operating income trend closely, increasing from 4.61% to 5.84% of revenue over the period, reflecting the positive impact of lower interest expense and stable other income/expense items.
Income Tax Expense
Income tax expense showed variability, decreasing sharply in 2019 to -0.99% and fluctuating thereafter, settling at -1.11% in 2022. This variability could arise from changes in tax rates, benefits, or income composition.
Net Earnings
Net earnings from continuing operations improved substantially, rising from 3.06% in 2017 to 4.74% in 2022. The enhanced profitability is primarily driven by operating income growth and lower interest expenses, partially offset by fluctuations in tax expense. Gains from discontinued operations were noted only in 2017, contributing modestly to net earnings in that year.

In summary, the data indicates that while the company faced increasing cost pressures at the gross profit level, it successfully improved operating efficiency and reduced financing costs, enabling consistent growth in operating and net profitability ratios over the analyzed periods. The restructuring activities in 2021 appear to be significant but were managed such that overall profitability improved in subsequent years.