Best Buy Co. Inc. (NYSE:BBY)

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Area Asset Turnover: U.S.

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).

Best Buy Co. Inc.; U.S.; area asset turnover calculation

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in millions)
Revenue from external customers	47,830)	43,293)	40,114)	39,304)	38,662)	36,248)
Property and equipment, net	2,128)	2,135)	2,150)	2,321)	2,205)	2,120)
Area Activity Ratio
Area asset turnover¹	22.48	20.28	18.66	16.93	17.53	17.10

¹ 2022 Calculation
Area asset turnover = Revenue from external customers ÷ Property and equipment, net
= 47,830 ÷ 2,128 = 22.48

An analysis of the financial metrics for the U.S. geographic area reveals a consistent increase in operational efficiency over the six-year period ending January 29, 2022. This efficiency is primarily driven by sustained revenue growth coupled with a disciplined approach to maintaining net property and equipment.

Revenue Growth Trends: Revenue from external customers exhibited a steady upward trajectory, rising from 36,248 million US dollars in 2017 to 47,830 million US dollars in 2022. The growth accelerated notably in the final two years of the period, with a significant increase between January 30, 2021, and January 29, 2022.
Net Property and Equipment Stabilization: The investment in net property and equipment remained relatively stagnant. After a slight peak of 2,321 million US dollars in February 2019, the asset base decreased and stabilized, ending the period at 2,128 million US dollars in 2022. This value is nearly identical to the 2,120 million US dollars reported in 2017, indicating that revenue expansion was achieved without requiring significant additional capital expenditure in physical assets.
Area Asset Turnover Performance: The area asset turnover ratio demonstrates a strong positive trend, increasing from 17.10 in 2017 to 22.48 in 2022. While a minor contraction occurred in February 2019, the ratio grew aggressively from 2020 onwards. This progression indicates a substantial improvement in the company's ability to generate sales per unit of net property and equipment, reflecting enhanced asset productivity and operational leverage.

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Area Asset Turnover: Canada

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).

Best Buy Co. Inc.; Canada; area asset turnover calculation

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in millions)
Revenue from external customers	3,911)	3,600)	3,125)	3,214)	3,187)	2,899)
Property and equipment, net	120)	122)	140)	161)	190)	156)
Area Activity Ratio
Area asset turnover¹	32.59	29.51	22.32	19.96	16.77	18.58

¹ 2022 Calculation
Area asset turnover = Revenue from external customers ÷ Property and equipment, net
= 3,911 ÷ 120 = 32.59

The financial performance of the Canadian geographic segment between January 2017 and January 2022 is characterized by a significant improvement in asset efficiency, driven by concurrent revenue growth and a strategic reduction in the net value of property and equipment.

Revenue Trends: Revenue from external customers exhibited a general upward trajectory over the six-year period. Starting at 2,899 million US dollars in January 2017, revenues grew to 3,911 million US dollars by January 2022. While a slight contraction occurred in February 2020, where revenue dipped to 3,125 million US dollars, the segment experienced accelerated growth in the subsequent two years, indicating strong market demand or successful pricing strategies.
Property and Equipment Management: The net value of property and equipment showed a divergent trend compared to revenue. After an initial increase to 190 million US dollars in February 2018, there was a consistent and sustained decline in asset value, reaching 120 million US dollars by January 2022. This downward trend suggests a transition toward a more asset-light operational model or the impact of asset depreciation and divestment.
Area Asset Turnover Efficiency: The area asset turnover ratio demonstrates a marked increase in operational efficiency. The ratio rose from 18.58 in January 2017 to 32.59 in January 2022, nearly doubling over the period. The most significant acceleration in efficiency occurred between February 2020 and January 2022, as the ratio climbed from 22.32 to 32.59. This indicates that the segment is generating substantially higher sales volumes relative to its physical investment in property and equipment.

The correlation between rising revenues and declining net property and equipment suggests that the Canadian operations have successfully optimized their physical footprint. The substantial increase in the area asset turnover ratio confirms that the segment has achieved higher productivity per unit of capital invested in fixed assets.

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Area Asset Turnover: Other

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).

Best Buy Co. Inc.; Other; area asset turnover calculation

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in millions)
Revenue from external customers	20)	369)	399)	361)	302)	256)
Property and equipment, net	2)	3)	38)	28)	26)	17)
Area Activity Ratio
Area asset turnover¹	10.00	123.00	10.50	12.89	11.62	15.06

¹ 2022 Calculation
Area asset turnover = Revenue from external customers ÷ Property and equipment, net
= 20 ÷ 2 = 10.00

The financial performance of the "Other" geographic area exhibits a period of growth followed by a significant contraction in both operational scale and asset base. Between 2017 and 2020, revenue grew consistently, peaking at 399 million US dollars in February 2020. However, this growth was followed by a moderate decline in 2021 and a precipitous drop to 20 million US dollars by January 2022, indicating a substantial reduction in activity within this segment.

Revenue and Asset Correlation: From 2017 to 2020, there was a positive correlation between revenue growth and the expansion of net property and equipment, which increased from 17 million to 38 million US dollars. This suggests a phase of capital investment to support increasing sales. This trend reversed sharply after 2020, with property and equipment falling to 3 million US dollars in 2021 and 2 million US dollars in 2022, coinciding with the decline in revenue.
Area Asset Turnover Volatility: The asset turnover ratio remained relatively stable between 10.50 and 15.06 from 2017 through 2020, reflecting a consistent relationship between fixed asset utilization and revenue generation. A significant anomaly occurred in 2021, where the ratio spiked to 123.00. This outlier was driven by a drastic reduction in the net property and equipment base while revenue remained comparatively high, suggesting a divestment of physical assets or a shift toward an asset-light operational model in that period.
Terminal Segment Performance: By January 2022, the asset turnover ratio normalized to 10.00. While this ratio is consistent with historical levels seen in 2020, it is underpinned by a near-total collapse in revenue and a minimal asset base. The combined decline in revenue and property and equipment suggests a strategic withdrawal or a phasing out of operations within the "Other" geographic area.

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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).

Best Buy Co. Inc., revenue from external customers by geographic area

US$ in millions

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
U.S.	47,830)	43,293)	40,114)	39,304)	38,662)	36,248)
Canada	3,911)	3,600)	3,125)	3,214)	3,187)	2,899)
Other	20)	369)	399)	361)	302)	256)
Total	51,761)	47,262)	43,638)	42,879)	42,151)	39,403)

Total revenue exhibited a consistent upward trajectory from January 28, 2017, through January 29, 2022, increasing from 39,403 million USD to 51,761 million USD. This growth pattern indicates a steady expansion of the company's market reach, with a notable acceleration in revenue gains during the final two fiscal years of the period.

U.S. Market Performance: The United States serves as the primary revenue driver, showing continuous growth from 36,248 million USD in 2017 to 47,830 million USD in 2022. A significant surge is observed between January 30, 2021, and January 29, 2022, where revenue increased by approximately 4,537 million USD.
Canadian Market Performance: Revenue from Canada grew from 2,899 million USD in 2017 to 3,911 million USD in 2022. While the overall trend is positive, a slight contraction occurred in February 2020, where revenue dipped to 3,125 million USD from 3,214 million USD the previous year, before recovering strongly in 2021 and 2022.
Other Geographic Areas: The "Other" category experienced gradual growth from 256 million USD in 2017 to a peak of 399 million USD in February 2020. However, this segment underwent a precipitous decline thereafter, falling to 369 million USD in 2021 and nearly disappearing to 20 million USD by January 29, 2022, suggesting a strategic withdrawal from these markets.
Geographic Concentration: There is a heavy concentration of revenue within the U.S. market, which consistently represents over 90% of total revenue. The reliance on the domestic market intensified by 2022 following the sharp reduction in revenue from other international territories.

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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).

Best Buy Co. Inc., property and equipment, net by geographic area

US$ in millions

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
U.S.	2,128)	2,135)	2,150)	2,321)	2,205)	2,120)
Canada	120)	122)	140)	161)	190)	156)
Other	2)	3)	38)	28)	26)	17)
Total	2,250)	2,260)	2,328)	2,510)	2,421)	2,293)

The net property and equipment across all geographic segments exhibited a growth phase from 2017 to 2019, followed by a period of contraction and stabilization through 2022. Total assets peaked in February 2019 at 2,510 million USD before declining to 2,250 million USD by January 2022.

United States Operations: The U.S. market represents the vast majority of the asset base. Net property and equipment increased from 2,120 million USD in 2017 to a peak of 2,321 million USD in 2019. Subsequently, a reduction occurred, with values stabilizing around 2,128 million USD by 2022, essentially returning to 2017 levels.
Canadian Operations: Assets in Canada showed a brief increase to 190 million USD in 2018 but entered a continuous downward trend thereafter. By January 2022, Canadian net property and equipment decreased to 120 million USD, representing a consistent reduction in capital investment or a steady increase in asset depreciation within the region.
Other Geographic Areas: This segment experienced modest growth between 2017 and 2020, reaching a high of 38 million USD. However, a precipitous decline occurred between 2020 and 2021, with assets dropping to 3 million USD and further declining to 2 million USD by 2022, indicating a significant divestiture or a strategic exit from these markets.
Overall Asset Distribution: The geographic concentration of net property and equipment has shifted increasingly toward the United States. While the U.S. has consistently held the majority of assets, the simultaneous contraction in Canada and the near-elimination of assets in other regions have increased the relative weight of U.S.-based infrastructure within the total asset portfolio.

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