Best Buy (BBY) Financial History

Constraints in the banking and capital markets or our vendor credit terms may have a material adverse impact on our liquidity.

•political conditions, diplomatic relationships and alliances and geopolitical events, including war and terrorism;

We have wholly-owned legal entities registered in various foreign countries, including Bermuda, Canada, China, India, Luxembourg, the Republic of Mauritius, the United Kingdom and Vietnam.

We may also communicate certain initiatives and goals regarding sustainability, responsible sourcing, social investments and other related matters in our SEC filings or in other public disclosures.

•the impact of regulatory and legislative uncertainty, such as changing U.S., state or other countries’ tax laws and regulations or evolving interpretations of existing tax laws, shifting federal policies, and an incr…

•the impact of litigation and dispute resolution, including class-action lawsuits involving consumers, shareholders and labor and employment matters, mass arbitration, pricing claims, and potential changes to arbitrat…

•the challenges of ensuring compliance with applicable labor and employment laws, including: laws governing the organization of unions and related rules that affect the nature of labor relations, which are frequently…

•the challenges of ensuring compliance with applicable product laws and regulations, including laws and regulations related to product safety, product transport and product disposal, as well as laws and regulations re…

•the potential for incremental costs related to compliance with new or existing environmental legislation or international agreements affecting greenhouse gas emissions, electronics recycling, water usage or product m…

•the difficulty of complying with sometimes conflicting statutes, regulations and executive orders in local, national and international jurisdictions;

Regulatory activity affecting the retail sector is dynamic, posing the potential risk of fines and additional operating costs associated with compliance.

Increasing costs associated with information security and privacy, such as increased investment in technology and qualified staff, costs of compliance, costs resulting from fraud or criminal activity and costs of cybe…

We have been the target of attempted cyber-attacks and other security threats, and we may be subject to breaches of our information technology systems.

The effective and efficient operation of our business is dependent on our information technology systems and those of our information technology service providers.

Our expanding Best Buy Marketplace, including our existing Canadian platform and our recently launched U.S.

•seek recourse from manufacturers may be limited in foreign jurisdictions;

Most of our exclusive brand products are manufactured by contract manufacturers in China, Mexico and Southeast Asia, which may limit our ability to do the following:

•exposure and responsibility to consumers for warranty replacements and repairs as well as product liability claims (including bodily injury or death) and government-enforced actions, some of which may require us to t…

We are subject to risks related to the products we sell, including those products sold on our Best Buy Marketplace platform and products under our exclusive brand labels (Best Buy Essentials, Insignia, Lively, Rocketf…

We engage key third-party business partners to support various functions of our business, including delivery and installation, customer warranty, information technology, web hosting and cloud-based services, customer…

•the consolidation, business failures and heightened political scrutiny associated with the transportation and distribution sectors.

•our third parties’ ability to meet our standards or commitments;

Our supply chain assets are a critical part of our operations, particularly considering industry trends and initiatives, such as ship-from-store and the emphasis on fast delivery when purchasing online.

•our ability to adjust store operating models to adapt to changing consumer patterns;

Managing our real estate portfolio effectively is critical to our omnichannel strategy.

Failure to effectively manage our infrastructure, real estate portfolio and market segmentation strategy may negatively impact our business.

If our new or emerging strategies are unsuccessful, our reputation could be negatively impacted.

•manage potential adverse impacts on relationships with employees, vendors and other key partners of our existing business.

•generate expected synergies, such as cost reductions and other benefits; and

•maintain appropriate internal controls over financial reporting;

•accurately predict customer demand, meet customer expectations or generate forecasted revenue or profitability;

•integrate aspects of potential strategies into our existing business, such as new product or service offerings or information technology systems;

•identify or appropriately evaluate the risks in our diligence assessments;

We may pursue new strategic initiatives, including business relationships, acquisitions, and/or adding or expanding revenue streams, including Best Buy Ads and Best Buy Marketplace.

Failure to effectively identify, manage and execute enterprise-wide strategies could have a negative impact on our business.

The ubiquity of social media means that customer feedback and other information about our company, which may include fictitious information, are shared with a broad audience in a manner that is easily accessible and r…

While we source products we sell from a wide variety of domestic and international vendors, a significant portion of our merchandise comes from a relatively small group of key suppliers.

•non-compliance with new and existing laws and regulations applicable to these services.

•the potential impact on in-home services of inclement weather, health and safety concerns and catastrophic events;

•customer devices in our possession and the related responsibility for the security of those devices and the privacy of the data they hold;

•errors or omissions in the fulfillment of services;

•bad actors posing as Geek Squad and/or customer care;

We offer a full range of services that complement our product offerings, including consultation, delivery, health-related services, installation, memberships, repair, set-up, technical support and warranty-related ser…

Our performance is highly dependent on attracting, retaining and engaging appropriately qualified employees in our stores, service centers, distribution centers, field and corporate offices.

Further, as our competitors develop and expand their strategic use of AI, our operations and profitability could be adversely impacted if we fail to execute or maintain our own focused AI strategy that drives technolo…

•excess inventory, which may require heavy discounting, liquidation or storage;

We operate in a highly and increasingly dynamic industry sector fueled by constant technological innovation, advancement and disruption, including the rapid integration of artificial intelligence (“AI”) into consumer…

Catastrophic events could adversely affect our operating results.

One or more of these factors could have a material adverse effect on our supply chain, the cost of our products or our revenues and financial results.

Ongoing or emerging conflicts, including those in the Middle East, Ukraine and the South China Sea, may continue to impact fuel prices, inflation, the global supply chain, cybersecurity and other macroeconomic conditi…

Geopolitical tensions, both domestic and international, including issues related to trade routes, political instability and divisiveness, the potential implementation of more restrictive trade policies, tariff increas…

•consumers' appetite for complementary services (for example, My Best Buy Plus™ or My Best Buy Total™ membership).

•consumers' choice of brand, model or price-point; and

•how frequently consumers upgrade or replace their devices;

To varying degrees, our products and services are sensitive to changes in macroeconomic conditions.

These factors could significantly disrupt our international operations and have a material adverse effect on our revenue and profitability and could lead us to incur material impairments and other exit costs.

the impact of changes in the federal government on laws, regulations and policies; and the potential for an increasing patchwork of state regulations.

the possibility of a federal ban on arbitration clauses in consumer or employee contracts, which could increase costs of dispute resolution;

the impact of other new or changing statutes and regulations related to, but not limited to, finance, healthcare, corporate governance matters, escheatment, pricing, anti-money laundering, content, distribution, copy…

The laws and regulations with which we must comply expose us to complex compliance and litigation risks that could have a material adverse effect on our operations.

The integration of AI into our operations increases cybersecurity and privacy risks (including unauthorized or misuse of AI tools) and could lead to potential unauthorized access, misuse, acquisition, release, disclos…

We utilize complex information technology platforms to operate our websites and mobile applications.

We face a heightened risk of cybersecurity attacks or data security incidents, which could have a material adverse impact on our business.

Further, as our online interactions and sales have increased and have become critical to our growth, and as many employees now use hybrid or full-time remote-working arrangements, the risk of any interruption of our i…

As we continue to expand our use of software as a service (SaaS) providers, we may face additional risks that may compromise our security or disrupt our business capabilities, including ensuring the proper configurati…

Our information technology systems and those of our partners are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, worms, other malicious computer progra…

We have greater exposure to product-related risks in our exclusive brand category, including:

geopolitical affairs, including tariffs;

operational failures from growing demand on existing technological infrastructure;

uncertainty of accurately forecasting financial performance, including the impact of unforeseen changes in the business environment of Strategic Ventures, including, for example, the continuity of government funding…

state or local regulations that may limit our ability to execute certain aspects of our Strategic Ventures;

the potential for increased scope of liability relating to services offerings provided by third parties on our behalf;

employees in transit using company vehicles to visit customer locations and employees being present in customer homes, which may increase our scope of liability;

responsibility for third parties that fail to meet our standards or fail to comply with applicable labor and independent contractor regulations;

pressure on traditional labor models to meet the evolving landscape of offerings and customer needs;

increased labor expenses and inability to accurately forecast staffing levels to meet customer needs and demands;

ongoing pressure on margins from our Best Buy membership offerings, and the risk that increased volumes will not fully compensate for lower margins;

inability to sustain and operate a technology infrastructure sufficient to support our services growth;

The risk accompanied with operating in the health sector may lead to a range of consequences, including, but not limited to, customer complaints, individual consumer claims or class actions, product recalls, temporary…

Our health sector offerings and the customers we serve bring us into scope for many significant regulatory requirements, including those enforced by the U.S.

In the health sector, we offer a range of products and services, including, for example, Personal Emergency Response (PERS) and Remote Patient Monitoring (RPM) technology and services.

The execution of our strategy relating to certain products and services (including health technology, services and logistics) brings business, financial and regulatory risks.

We operate in a competitive labor market and there is a risk that market increases in compensation and employer-provided benefits could have a material adverse effect on our profitability.

The retail sector continues to experience increased sales initiated online and using mobile applications, as well as online sales for both in-store or curbside pick-up.

While we constantly strive to offer consumers the best value, the retail sector is highly competitive.

As a consequence of these catastrophic events, we may experience interruptions to our operations or losses of property, equipment and/or inventory, which could adversely affect our revenue and profitability.

Additionally, heightened violence and crime in or around our stores, customer homes or businesses where we are performing services may further jeopardize the safety and security of our workforce and customers as well…

Three of our largest states by total sales (California, Texas and Florida) are particularly vulnerable to natural disasters and extreme weather conditions.

The number and severity of certain catastrophic events is increasing in many of our markets.

terrorism (including related cyber threats), civil unrest, violent acts or other conflicts.

power loss, telecommunications failures, or software and hardware malfunctions; and

natural disasters or extreme weather events (such as storms, blizzards, extreme temperatures, earthquakes, hurricanes, floods, fires and droughts), including those related to, or exacerbated by, climate change;

The risk and actual occurrence of various catastrophic events could have a material adverse effect on our financial performance.

While we directly import approximately 2% to 3% of our overall assortment, our complex supply chain is heavily reliant on vendor imports from China and Mexico, which we currently estimate make up approximately 55% and…

These factors could significantly disrupt our international operations, impact our return on investment or necessitate adjustments to our international strategy, including modifying or exiting our operations in certai…

We are subject to changing rules and regulations promulgated by several governmental and self-regulatory organizations, including the SEC, the New York Stock Exchange, the Financial Accounting Standards Board and vari…

•the challenges arising from regulatory lags in addressing and adapting to rapid AI advancements;

•the impact of other new or changing statutes and regulations that may require changes to our compliance programs and attendant costs of those programs;

•the potential lingering residual obligations due to the divestment of certain health-related services in fiscal 2026;

•increased legal and regulatory exposure resulting from new and expanding business areas (e.g., Best Buy Marketplace and Best Buy Ads), especially the potential impact of the unsettled legal landscape relating to thir…