Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Best Buy Co. Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
- Gross Profit Margin
- The gross profit margin demonstrates a gradual but consistent decline throughout the observed periods. Starting at approximately 23.59% in April 2017, the margin decreased steadily to about 21.46% by October 2022. This downward trend suggests increasing cost pressures or pricing challenges affecting profitability at the gross level.
- Operating Profit Margin
- The operating profit margin exhibits more variation than the gross profit margin. Initially around 4.51% in April 2017, it experienced minor fluctuations but showed an overall upward trend, peaking at approximately 6.25% in October 2021. However, after this peak, the margin declined towards 4.18% by October 2022. This pattern may reflect changes in operating efficiencies or expense management, with the recent decline indicating potential challenges in sustaining operating income levels.
- Net Profit Margin
- Net profit margin reflects some volatility but also a general improvement until early 2021, increasing from about 3.01% in April 2017 to a high of around 5.05% in October 2021. Following this, it decreased noticeably to approximately 3.23% in October 2022. This rise and fall indicate improvements in overall profitability including non-operating items and taxes, with the recent downtrend possibly linked to elevated costs or lower income beyond operational expenses.
- Return on Equity (ROE)
- The return on equity metric shows a pronounced upward trajectory over the majority of the periods. Starting at approximately 26.38% in April 2017, ROE increased substantially, reaching a notably high peak of 81.26% in January 2022 before declining to 51.79% by October 2022. Such high values suggest exceptional effectiveness in generating returns for shareholders during peak periods, though the sharp post-peak decline indicates increased volatility or changing capital structures.
- Return on Assets (ROA)
- Return on assets follows a fluctuating but overall upward pattern with some troughs. Beginning at 9.16% in April 2017, ROA experienced variability, peaking near 14.43% in April 2022 before falling to 9.11% in October 2022. This suggests varied efficiency in asset utilization over time, with recent reductions possibly tied to changes in asset base productivity or profit generation capability.
- Summary of Trends and Insights
- Overall, the data indicate sustained pressure on gross profit margins over time, suggesting rising costs or weaker pricing power at the product level. Despite this, operating and net profit margins improved notably until around 2021, pointing to operational improvements and better overall profitability management during that period. Both margins declined thereafter, indicating emerging challenges. The return on equity surged impressively, reflecting strong shareholder returns especially in the 2021-2022 timeframe, though this was followed by a significant decline, possibly linked to changes in financial leverage or profitability. Return on assets displayed a generally positive trend with some volatility, underscoring fluctuating asset efficiency. These patterns highlight a period of strong profitability enhancements followed by recent setbacks across key financial performance indicators.
Return on Sales
Return on Investment
Gross Profit Margin
Best Buy Co. Inc., gross profit margin calculation (quarterly data)
| Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | Feb 3, 2018 | Oct 28, 2017 | Jul 29, 2017 | Apr 29, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Gross profit | 2,332) | 2,287) | 2,353) | 3,313) | 2,802) | 2,810) | 2,715) | 3,543) | 2,795) | 2,270) | 1,965) | 3,235) | 2,361) | 2,283) | 2,169) | 3,283) | 2,324) | 2,229) | 2,125) | 3,421) | 2,280) | 2,153) | 2,022) | |||||||
| Revenue | 10,587) | 10,329) | 10,647) | 16,365) | 11,910) | 11,849) | 11,637) | 16,937) | 11,853) | 9,910) | 8,562) | 15,196) | 9,764) | 9,536) | 9,142) | 14,801) | 9,590) | 9,379) | 9,109) | 15,363) | 9,320) | 8,940) | 8,528) | |||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| Gross profit margin1 | 21.46% | 21.84% | 22.21% | 22.49% | 22.68% | 22.69% | 22.49% | 22.37% | 22.55% | 22.64% | 22.86% | 23.03% | 23.35% | 23.36% | 23.32% | 23.23% | 23.25% | 23.29% | 23.35% | 23.43% | 23.55% | 23.58% | 23.59% | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 46.24% | 45.53% | 44.73% | 43.81% | 43.04% | 42.65% | 42.14% | 42.03% | 41.31% | 40.68% | 40.01% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 33.51% | 33.53% | 33.58% | 33.63% | 33.72% | 33.72% | 33.94% | 33.95% | 34.03% | 34.10% | 34.06% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 33.38% | 33.33% | 33.49% | 33.30% | 33.06% | 32.97% | 33.06% | 33.01% | 32.94% | 32.89% | 32.23% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 27.92% | 28.03% | 28.45% | 28.50% | 28.78% | 28.91% | 27.61% | 23.66% | 23.97% | 23.61% | 25.04% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
1 Q3 2023 Calculation
Gross profit margin = 100
× (Gross profitQ3 2023
+ Gross profitQ2 2023
+ Gross profitQ1 2023
+ Gross profitQ4 2022)
÷ (RevenueQ3 2023
+ RevenueQ2 2023
+ RevenueQ1 2023
+ RevenueQ4 2022)
= 100 × (2,332 + 2,287 + 2,353 + 3,313)
÷ (10,587 + 10,329 + 10,647 + 16,365)
= 21.46%
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue figures demonstrate a distinct seasonal pattern, with marked increases in the fiscal quarters ending in February each year, coinciding with the holiday sales season. These peak revenues, for example in February 2018, 2019, 2020, 2021, and 2022, consistently exceed 14 billion US dollars, significantly outperforming other quarters. Outside these peaks, revenue tends to stabilize between approximately 8.5 billion and 11.9 billion US dollars. There is an observable upward trend in peak revenues from 15.4 billion in early 2018 to about 16.3 billion in early 2022, suggesting growth in high-season sales.
- Gross Profit Analysis
- Gross profit values correspond closely with the revenue pattern, also experiencing pronounced peaks in the holiday quarters. These peaks rise from around 3.4 billion US dollars in early 2018 to over 3.5 billion US dollars in early 2021, before showing a slight decrease in 2022. In quarters outside the holiday spikes, gross profit remains consistently between approximately 2.0 billion and 2.8 billion US dollars. Despite fluctuations, gross profit levels generally reflect the seasonality observed in revenue, with some indication of growth over the multi-year period.
- Gross Profit Margin Dynamics
- Gross profit margin exhibits a gradual but consistent decline over the observed timeframe. Starting at about 23.6% in mid-2017, the margin decreases steadily to approximately 21.5% by late 2022. This decline suggests increasing pressure on profit margins, possibly due to cost increases, competitive pricing, or changes in sales mix. The decline is continuous and does not fluctuate sharply with seasonal revenue or profit changes, indicating a structural margin contraction rather than temporary factors.
- Overall Financial Insights
- The data reveals clear seasonality typical of the consumer electronics retail sector, with significant revenue and profit peaks aligning with holiday quarters. While revenues and gross profits show growth potential, particularly during peak periods, the declining gross profit margin over nearly six years indicates challenges in maintaining profitability levels. Management may need to investigate factors affecting margin erosion, such as cost control, pricing strategies, or product portfolio adjustments, to sustain long-term profitability alongside revenue growth.
Operating Profit Margin
Best Buy Co. Inc., operating profit margin calculation (quarterly data)
| Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | Feb 3, 2018 | Oct 28, 2017 | Jul 29, 2017 | Apr 29, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Operating income | 365) | 371) | 462) | 803) | 670) | 797) | 769) | 1,033) | 561) | 568) | 229) | 967) | 395) | 313) | 334) | 978) | 322) | 335) | 265) | 872) | 350) | 321) | 300) | |||||||
| Revenue | 10,587) | 10,329) | 10,647) | 16,365) | 11,910) | 11,849) | 11,637) | 16,937) | 11,853) | 9,910) | 8,562) | 15,196) | 9,764) | 9,536) | 9,142) | 14,801) | 9,590) | 9,379) | 9,109) | 15,363) | 9,320) | 8,940) | 8,528) | |||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| Operating profit margin1 | 4.18% | 4.68% | 5.38% | 5.87% | 6.25% | 6.04% | 5.82% | 5.06% | 5.11% | 4.97% | 4.42% | 4.60% | 4.67% | 4.52% | 4.59% | 4.43% | 4.13% | 4.22% | 4.23% | 4.37% | 4.60% | 4.55% | 4.51% | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 4.76% | 3.29% | 2.54% | 2.38% | 2.58% | 3.15% | 4.12% | 5.30% | 6.18% | 6.68% | 6.63% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 15.33% | 15.30% | 15.20% | 15.24% | 15.10% | 14.79% | 14.70% | 13.84% | 14.01% | 13.99% | 13.85% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 10.74% | 12.76% | 12.72% | 12.56% | 12.36% | 11.79% | 11.55% | 10.77% | 10.64% | 10.53% | 9.30% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 9.76% | 9.77% | 10.18% | 9.79% | 9.55% | 9.32% | 7.05% | 1.81% | 3.13% | 3.26% | 5.86% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
1 Q3 2023 Calculation
Operating profit margin = 100
× (Operating incomeQ3 2023
+ Operating incomeQ2 2023
+ Operating incomeQ1 2023
+ Operating incomeQ4 2022)
÷ (RevenueQ3 2023
+ RevenueQ2 2023
+ RevenueQ1 2023
+ RevenueQ4 2022)
= 100 × (365 + 371 + 462 + 803)
÷ (10,587 + 10,329 + 10,647 + 16,365)
= 4.18%
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable patterns and trends in the company's operating income, revenue, and operating profit margin over the observed periods.
- Operating Income
- Operating income exhibits a generally cyclical trend with peak values consistently occurring in quarters corresponding roughly to the early part of each year (February to March periods). For instance, substantial spikes are evident in Feb 3, 2018 (872 million USD), Feb 2, 2019 (978 million USD), Feb 1, 2020 (967 million USD), Jan 30, 2021 (1,033 million USD), and Jan 29, 2022 (803 million USD). These peaks are followed by notable declines in subsequent quarters. While the overall level of operating income fluctuates, the highest operating income values have generally increased over time, peaking in early 2021.
- Revenue
- Revenue shows a similar seasonal pattern to operating income, with marked increases in the quarters early in the year. Each year, revenues elevate significantly during the quarter ending in February or early spring months, such as 15,363 million USD in Feb 3, 2018, 14,801 million USD in Feb 2, 2019, 15,196 million USD in Feb 1, 2020, and reaching a peak at 16,937 million USD in Jan 30, 2021. Outside these peak quarters, revenues remain relatively stable, fluctuating between approximately 8,500 and 12,000 million USD. The upward trend in peak quarterly revenue suggests effective seasonal sales performance, particularly noticeable in the period around early 2021.
- Operating Profit Margin
- The operating profit margin remained relatively stable in the earlier periods, fluctuating modestly between approximately 4.1% and 4.6%. Starting in 2020 and continuing through 2021, there is a distinct improvement in margins, with peaks noted at 5.11% in Oct 31, 2020 and a high of 6.25% in Oct 30, 2021. This indicates enhanced operational efficiency or improved cost management during that period. However, margins declined in the latest quarters, decreasing to 4.18% by Oct 29, 2022, suggesting some pressure on profitability.
In summary, the data reveals a clear seasonal pattern with strong performance in early-year quarters reflected in both revenue and operating income. Over the period, peak revenues and operating income levels have generally increased, reaching the highest points around 2021. The operating profit margin shows improvement in the 2020-2021 period, indicating better profitability, though this was followed by a decline in the latest quarters. These trends highlight the company's cyclical business nature, the significance of specific seasonal quarters, and fluctuations in profitability management over time.
Net Profit Margin
Best Buy Co. Inc., net profit margin calculation (quarterly data)
| Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | Feb 3, 2018 | Oct 28, 2017 | Jul 29, 2017 | Apr 29, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net earnings | 277) | 306) | 341) | 626) | 499) | 734) | 595) | 816) | 391) | 432) | 159) | 745) | 293) | 238) | 265) | 735) | 277) | 244) | 208) | 364) | 239) | 209) | 188) | |||||||
| Revenue | 10,587) | 10,329) | 10,647) | 16,365) | 11,910) | 11,849) | 11,637) | 16,937) | 11,853) | 9,910) | 8,562) | 15,196) | 9,764) | 9,536) | 9,142) | 14,801) | 9,590) | 9,379) | 9,109) | 15,363) | 9,320) | 8,940) | 8,528) | |||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| Net profit margin1 | 3.23% | 3.60% | 4.33% | 4.74% | 5.05% | 4.85% | 4.44% | 3.80% | 3.79% | 3.75% | 3.33% | 3.53% | 3.54% | 3.52% | 3.54% | 3.41% | 2.52% | 2.44% | 2.39% | 2.37% | 3.09% | 3.00% | 3.01% | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 3.62% | 2.43% | 0.82% | -0.53% | 2.25% | 2.39% | 4.48% | 7.10% | 5.73% | 6.64% | 6.42% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 10.87% | 10.88% | 10.83% | 10.87% | 10.79% | 10.55% | 10.45% | 9.74% | 9.94% | 9.91% | 9.79% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 6.97% | 8.84% | 8.85% | 8.77% | 8.63% | 7.41% | 7.23% | 6.51% | 6.29% | 7.12% | 6.17% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 6.90% | 6.77% | 6.69% | 6.76% | 5.85% | 5.81% | 4.00% | 0.28% | 2.24% | 2.11% | 4.57% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
1 Q3 2023 Calculation
Net profit margin = 100
× (Net earningsQ3 2023
+ Net earningsQ2 2023
+ Net earningsQ1 2023
+ Net earningsQ4 2022)
÷ (RevenueQ3 2023
+ RevenueQ2 2023
+ RevenueQ1 2023
+ RevenueQ4 2022)
= 100 × (277 + 306 + 341 + 626)
÷ (10,587 + 10,329 + 10,647 + 16,365)
= 3.23%
2 Click competitor name to see calculations.
The financial data reveals several key trends in the company's quarterly performance over the analyzed periods. Revenue has exhibited fluctuations corresponding with specific quarters, generally reflecting strong seasonality. Net earnings have followed a similar pattern, with notable spikes in certain quarters.
- Revenue Trends
- The quarterly revenue figures show a pattern of increased sales during the early months of each year, with peaks typically occurring in the first and fourth fiscal quarters. For instance, significant revenue surges are observed in February 2018, February 2019, February 2020, January 2021, and January 2022, where revenues exceeded 14,000 million US dollars, sometimes reaching above 16,000 million. Additionally, there is a recurring dip during the middle quarters, especially around May and August, where revenues decrease to levels near or below 10,000 million US dollars. This trend suggests a cyclical demand pattern likely related to seasonal consumer behavior and promotional cycles.
- Net Earnings Patterns
- Net earnings also demonstrate seasonality, with higher earnings in the first quarter of each year. For instance, earnings peak sharply in February 2018 (364 million), February 2019 (735 million), February 2020 (745 million), January 2021 (816 million), and January 2022 (626 million). These peaks coincide with the revenue spikes, indicating that profit increases are largely driven by higher sales volumes during these periods. Outside these peak quarters, net earnings tend to decrease, often falling below 300 million dollars, sometimes near 150 million, reflecting the cyclical nature of profitability aligned with revenue fluctuations.
- Net Profit Margin Observations
- The net profit margin shows a gradual improvement over the period, rising from around 3.0% in 2017 to consistently above 4.0% in 2021. The margin peaks at 5.05% in October 2021, indicating enhanced profitability despite fluctuating revenues and net earnings. However, a decline is noted in 2022 quarters, with margins falling back to approximately 3.23% by October 2022. This decline may suggest increased costs or competitive pressures reducing profitability in the most recent quarters. Notably, even during peak revenue quarters, margins remain relatively stable, suggesting operational efficiency that mitigates variability in earnings relative to sales.
Overall, the data reflects a company with strong seasonal sales performance, highlighted by peak revenues and earnings in early-year quarters. Profitability margins have improved steadily until 2021 but show signs of compression in 2022. The interplay between revenue growth, earnings volatility, and margin shifts suggests strategic opportunities to manage cost controls and stabilize profits during lower revenue periods.
Return on Equity (ROE)
Best Buy Co. Inc., ROE calculation (quarterly data)
| Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | Feb 3, 2018 | Oct 28, 2017 | Jul 29, 2017 | Apr 29, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net earnings | 277) | 306) | 341) | 626) | 499) | 734) | 595) | 816) | 391) | 432) | 159) | 745) | 293) | 238) | 265) | 735) | 277) | 244) | 208) | 364) | 239) | 209) | 188) | |||||||
| Equity | 2,993) | 2,892) | 2,767) | 3,020) | 4,278) | 4,335) | 4,158) | 4,587) | 4,086) | 3,778) | 3,410) | 3,479) | 3,125) | 3,285) | 3,354) | 3,306) | 3,012) | 3,186) | 3,420) | 3,612) | 4,152) | 4,347) | 4,499) | |||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| ROE1 | 51.79% | 61.27% | 79.51% | 81.26% | 61.80% | 58.50% | 53.73% | 39.20% | 42.27% | 43.12% | 42.08% | 44.29% | 48.99% | 46.12% | 45.35% | 44.28% | 36.29% | 33.11% | 29.82% | 27.69% | 29.94% | 27.56% | 26.38% | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 10.97% | 7.75% | 2.78% | -1.86% | 8.24% | 8.83% | 15.98% | 24.13% | 21.78% | 25.64% | 26.04% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 1,317.03% | 7,124.47% | — | — | 1,539.90% | 736.64% | 844.74% | 390.00% | 813.68% | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | — | — | — | — | — | — | 1,532.36% | 406.05% | 131.77% | 131.40% | 266.43% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 60.02% | 62.26% | 59.63% | 54.69% | 41.40% | 39.21% | 24.63% | 1.55% | 13.47% | 15.26% | 35.54% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
1 Q3 2023 Calculation
ROE = 100
× (Net earningsQ3 2023
+ Net earningsQ2 2023
+ Net earningsQ1 2023
+ Net earningsQ4 2022)
÷ Equity
= 100 × (277 + 306 + 341 + 626)
÷ 2,993 = 51.79%
2 Click competitor name to see calculations.
- Net Earnings
- Over the observed periods, net earnings exhibit considerable fluctuations with a general cyclical pattern. Initial quarters from April 2017 to February 2018 show a gradual increase, peaking significantly in early 2018. Subsequently, earnings decline in mid-2018 but rebound sharply toward the end of that year and early 2019. The period around the start of 2020 again shows a pronounced spike in earnings, followed by volatility throughout 2020 and 2021, with earnings reaching a peak in early 2021. The latest data points from 2022 indicate a downward trend, with net earnings falling over the last few quarters.
- Equity
- Equity values demonstrate a generally declining trend from April 2017 through late 2019, reflecting possible reductions due to losses, buybacks, or other equity changes. However, a recovery phase appears starting around early 2020, with equity increasing steadily until early 2021. Following this recovery, equity levels decline again from mid-2021 onward, stabilizing somewhat but remaining below earlier peaks. The fluctuations suggest periods of variable shareholder investment or retained earnings impacting book value.
- Return on Equity (ROE)
- The ROE metric shows a strong upward trajectory throughout most of the timeline, indicating increasing efficiency in generating profits from shareholders' equity. Starting at approximately 26% in early 2017, ROE rises consistently to reach unusually high levels above 80% at the start of 2022. This surge correlates with periods of declining equity against relatively high net earnings, amplifying return ratios. Although still high, ROE decreases somewhat in the most recent quarters but remains elevated, suggesting sustained strong profitability relative to equity size despite recent net earnings declines.
- Overall Trends and Insights
- The data indicate a business experiencing significant fluctuations in net earnings and equity levels, with net income peaks often followed by declines. Equity trends reflect some periods of contraction and recovery, likely influenced by company financial strategies or market conditions. The substantial growth in ROE suggests improved capital utilization efficiency over time, although extremely high ROE in recent periods may also signal lower equity bases rather than proportional increases in earnings. The decline in net earnings and equity in the latest quarters may warrant attention to sustainability and future performance risks.
Return on Assets (ROA)
Best Buy Co. Inc., ROA calculation (quarterly data)
| Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | Feb 3, 2018 | Oct 28, 2017 | Jul 29, 2017 | Apr 29, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net earnings | 277) | 306) | 341) | 626) | 499) | 734) | 595) | 816) | 391) | 432) | 159) | 745) | 293) | 238) | 265) | 735) | 277) | 244) | 208) | 364) | 239) | 209) | 188) | |||||||
| Total assets | 17,021) | 15,419) | 15,251) | 17,504) | 20,102) | 18,579) | 17,705) | 19,067) | 21,202) | 17,412) | 15,605) | 15,591) | 16,926) | 14,978) | 14,550) | 12,901) | 15,000) | 11,993) | 12,082) | 13,049) | 14,785) | 13,444) | 12,955) | |||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| ROA1 | 9.11% | 11.49% | 14.43% | 14.02% | 13.15% | 13.65% | 12.62% | 9.43% | 8.15% | 9.36% | 9.20% | 9.88% | 9.05% | 10.11% | 10.45% | 11.35% | 7.29% | 8.80% | 8.44% | 7.66% | 8.41% | 8.91% | 9.16% | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 4.12% | 2.74% | 0.92% | -0.59% | 2.64% | 2.77% | 5.21% | 7.93% | 6.87% | 8.17% | 8.33% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 22.24% | 22.27% | 21.57% | 22.86% | 21.82% | 21.54% | 20.35% | 18.23% | 18.66% | 18.67% | 18.68% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 14.23% | 18.04% | 17.00% | 18.91% | 16.63% | 14.19% | 13.32% | 12.49% | 10.55% | 11.06% | 9.98% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 11.96% | 12.40% | 12.04% | 11.53% | 8.87% | 8.73% | 4.99% | 0.29% | 2.38% | 2.68% | 6.63% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).
1 Q3 2023 Calculation
ROA = 100
× (Net earningsQ3 2023
+ Net earningsQ2 2023
+ Net earningsQ1 2023
+ Net earningsQ4 2022)
÷ Total assets
= 100 × (277 + 306 + 341 + 626)
÷ 17,021 = 9.11%
2 Click competitor name to see calculations.
- Net Earnings
- The net earnings demonstrate a pattern of volatility with distinct peaks and troughs throughout the periods. Initial quarters show moderate earnings in the range of approximately $188 million to $364 million, followed by a significant increase reaching peaks around $735 million and $745 million in early 2018 and 2020, respectively. Subsequently, there is a marked decline post-2020 peaks, with values decreasing to the $159 million to $277 million range towards the last recorded periods in 2022. This indicates episodic high profitability phases interspersed with periods of reduced earnings.
- Total Assets
- Total assets exhibit variability but generally show an upward trend in the medium term followed by a decline in the later periods. Starting at approximately $12.9 billion in early 2017, assets increase through 2019 and early 2020, peaking near $21.2 billion in late 2020. After this peak, asset levels decline steadily, falling below $17.1 billion by the last quarter measured in late 2022. This suggests phases of asset accumulation followed by asset contraction or divestiture in recent quarters.
- Return on Assets (ROA)
- The ROA percentages reflect a fluctuating but overall improving profitability relative to asset base across the timeframe. Initial ROA figures are in the 7.29% to 9.16% range, with some fluctuations up to 11.35% in early 2019. Notably, after 2019, there is a clear upward trajectory reaching a maximum of approximately 14.43% in early 2022, indicating enhanced efficiency in generating earnings from assets. However, a decline follows in the final periods down to approximately 9.11%, signaling reduced asset profitability towards the end of the sample.
- Summary Insights
- The financial data reveals cyclical patterns in earnings and asset levels, with substantial peaks in net earnings associated with elevated asset bases, particularly in 2018 and 2020. The rising ROA through much of the period suggests improvements in asset utilization efficiency, although recent declines may indicate emerging challenges. The simultaneous decrease in total assets and net earnings in the latter part of the timeline hints at a contraction phase or strategic repositioning. Overall, the company experiences periods of strong performance and asset growth, interspersed with phases of consolidation and decreased profitability.