Best Buy Co., Inc.

New or substantially reworded (8)

• While we directly import approximately 1% to 3% of our overall assortment, our global supply chain for consumer electronics is heavily reliant on vendor imports from foreign countries (including products sourced from China, Mexico and Southeast Asia). Consequently, our financial results are highly sensitive to changes in trade policies, tariffs and cross-border logistics. The scope, timing, and implementation of these policies remains uncertain and may result in new or modified tariff regimes, additional regulatory requirements, or further trade friction with U.S. trading partners. The uncertainty caused by ongoing tariff volatility creates challenges for planning inventory, pricing and supply chain strategies, which could continue to impact our cost structure, supply chain stability and overall financial results.

• Geopolitical tensions may provoke further retaliatory actions by our trading partners that may increase costs, disrupt our supply chain and/or impact our business operations. Read more

  China maintains significant control over the majority of rare earth elements, which are essential elements in many electronic devices. Should China reinstate its export ban on rare earth elements or take other actions that restrict U.S. supply of these minerals, it would impact both the consumer electronics we sell and our business’s underlying technological infrastructure.

• Catastrophic events, including those driven or intensified by climate change, pose a growing risk to our operating results and financial performance. Read more

  The frequency and severity of natural disasters or extreme weather events (such as storms, blizzards, extreme temperatures, earthquakes, hurricanes, floods, fires and droughts) are increasing in many of our key markets, particularly in our three largest states by total sales (California, Texas and Florida). We may experience other catastrophic events beyond natural disasters, including pandemics, civil unrest, power loss, telecommunications failures, software and hardware malfunctions, terrorism (including related cyber threats) and other acts of violence. Additionally, the locations where we do business could continue to be the subject of unrest and national attention, which impacts our ability to operate. The adverse effects of these…

• Such events may prevent our workforce and/or customers from reaching our stores and properties, disrupt segments of our supply chain and distribution network or impact critical third-party services. Read more

  These disruptions may impact our ability to procure goods or services necessary for operating our business and may affect our information technology systems, limiting our ability to transact with customers and fulfill orders.

• Shoppers are increasingly price-conscious when making discretionary purchases. Read more

  At the same time, online and multi-channel retailers are prioritizing fast, low-cost delivery options, including curbside pickup and guaranteed shipping times. Because our strategy is based on offering superior levels of customer service and a full range of complementary services, our cost structure may be higher than some of our competitors, creating additional margin pressure. Failure to manage these factors effectively while offering competitive delivery options could negatively impact our profit margins and the demand for our products.

• Our ability to remain competitive also depends on effectively maintaining and growing our customer base and accurately forecasting their spending levels. Read more

  An inability to drive traffic to physical and digital channels or to maintain brand relevance with target audiences could pose both an operational and financial risk. Additionally, failure to consistently meet customer expectations across stores, in-home services and online platforms could negatively impact our financial performance. Inability to quickly adapt to changes in customer behavior (e.g., AI-driven search, AI shopping bots) could have an adverse impact our financial results.

• Competition is becoming increasingly diverse, including through the expansion of retail media networks, such as our retail media network, Best Buy Ads, which competes for brand marketing spend and advertiser attention. Read more

  Additionally, as our Best Buy Marketplace platform expands, where third-party sellers can sell products on our platform, we face the added challenge of competing not only with external sellers but also with third-party sellers on our own platform.

• Globally, the cost and availability of memory components have been, and may continue to be, affected by industry-wide supply constraints. Read more

  While we work with vendors to adjust product and pricing strategies, these actions may not fully offset higher costs and inventory constraints, which may impact our margins and financial performance.

No longer in the text (4)

• 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 20%, respectively, of the products we purchase. Moreover, the consumer electronics we sell and our underlying technological infrastructure are dependent on rare earth elements, predominantly processed in China. Recently passed or proposed tariffs involving these countries could have an adverse impact on our operations. Any further changes in, or uncertainty surrounding, trade policies with these countries, including tariffs on products and parts imported by us or our vendors, as well as any international retaliatory actions, could increase costs, disrupt our supply chain and/or impact the availability of underlying technology critical to our operations. Additionally,…

• Catastrophic events, including the effects of climate change, could adversely affect our operating results.

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

  Events that affect our properties, supply chain, partners, workforce or customers may consist of, or be caused by, for example:

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