BBYBest Buy

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 various states. These rules and regulations continue to evolve, demanding increased attention and vigilance for compliance. In addition, regulators, customers, investors, employees and other stakeholders are increasingly focusing on cybersecurity and cybersecurity, CR&S matters and related disclosures. At the same time, regulators have increasingly expressed disclosures, with some expressing or pursued pursuing opposing views with respect to environmental, social and governance related initiatives. These opposing views may also be adopted by our customers, investors, employees and other stakeholders. We could face adverse financial or reputational impacts if we are perceived as misaligned with these differing perspectives or agendas. As a result of these changing rules, regulations and stakeholder expectations, there has been, and will likely continue to be, an increase in general and administrative expenses and an increase in management time and attention spent complying with or meeting such regulations and expectations. We may also communicate certain initiatives and goals regarding environmental matters, diversity, responsible sourcing, social investments and other related matters in our SEC filings or in other public disclosures. These initiatives and goals within the scope of CR&S could be difficult and expensive to implement, the technologies needed to implement them may not be cost-effective and may not advance at a sufficient pace and we could be criticized for the accuracy, adequacy or completeness of the disclosures. Further, statements about our initiatives and goals and progress toward those goals, may be based on measurement standards that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. In addition, we could be criticized or face legal action, including suits brought by shareholders, for the scope or nature of such initiatives or goals, or for any revisions to these goals. Any issues with our CR&S-related reporting, processes or goals, such as incomplete or inaccurate information, failure to achieve timely progress with respect to our goals, or misalignment with our stakeholders’ expectations, could negatively impact our reputation, business, financial performance or growth.

Throughout this MD&A, we refer to comparable sales. Comparable sales is a metric used by management to evaluate the performance of our existing stores, websites and call centers by measuring the change in net sales for a particular period over the comparable prior period of equivalent length. Comparable sales includes revenue from stores, websites and call centers stores operating for at least 14 full months. Revenue from online sales is included in comparable sales and represents months; sales initiated on a website website, app or app, regardless virtual store; advertising revenue; commercial sales; credit card revenue; gift card breakage; marketplace commission revenue; and sales of whether customers choose merchandise to have product delivered, or pick up product in store, curbside or at an alternative pick-up location. wholesalers and dealers. Revenue from acquisitions is included in comparable sales beginning with the first full quarter following the first anniversary of the date of the acquisition. Comparable sales also includes credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable. Revenue excludes revenue from stores closed more than 14 days, including days (including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters, is excluded from comparable sales disasters) until at least 14 full months after reopening. Comparable sales excludes reopening; the impact of certain periodic warranty-related profit-share revenue, revenue; the effect of fluctuations in foreign currency exchange rates (applicable to our International segment only) only); and the impact of the 53rd week (applicable in 53-week fiscal years only). Comparable sales is based on our fiscal calendar and is not adjusted to align calendar weeks. All periods presented apply this methodology consistently.

Cost of Sales Cost of products sold, including: Cash discounts on payments to merchandise vendors Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs and depreciation Customer shipping and handling expenses Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers Markdowns Physical inventory losses Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs Cost of services provided, including: Cost of replacement parts and related freight expenses Payroll and benefit costs for services employees associated with providing the service Selling, General and Administrative Expenses Advertising costs Charitable contributions Depreciation and amortization related to retail, services and corporate assets Long-lived asset impairment charges Occupancy and maintenance costs of retail, services and corporate facilities Other administrative costs, such as supplies, travel and lodging Outside and outsourced service fees Payroll and benefit costs for retail and corporate employees, including termination benefits incurred as part of normal operations Tender costs, including bank charges and costs associated with credit and debit card interchange fees Vendor allowances that are a reimbursement of specific, incremental and identifiable costs