Best Buy (BBY) risk factors, FY2025 10-K

Other

1. 01Macroeconomic pressures may adversely affect consumer spending and our financial results
2. 02Any decrease in consumer demand due to macroeconomic conditions may negatively impact our financial results
3. 03Geopolitical pressures may adversely impact our supply chain, the cost of our products or revenues and financial results
4. 04Catastrophic events, including the effects of climate change, could adversely affect our operating results
5. 05terrorism (including related cyber threats), civil unrest, violent acts or other conflicts
6. 06Many of the products we sell are highly susceptible to technological advancement, product life-cycle fluctuations and changes in consumer preferences
7. 07damage to our brand and reputation

Strategic Risks

1. 08We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability
2. 09If we fail to attract, retain and engage qualified employees, our operations and profitability may be negatively impacted. In addition, changes in market compensation rates could adversely affect our profitability
3. 10The execution of our strategy relating to certain products and services (including health technology, services and logistics) brings business, financial and regulatory risks
4. 11Our focus on services exposes us to certain risks that could have a material adverse impact on our revenue, profitability and reputation
5. 12Our reliance on key vendors and mobile network carriers subjects us to various risks and uncertainties which could affect our revenue and profitability
6. 13Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition
7. 14Failure to effectively manage and execute strategic ventures or partnerships could have a negative impact on our business
8. 15adverse impacts on relationships with employees, vendors and other key partners of our existing business or Strategic Ventures
9. 16Failure to effectively manage our real estate portfolio and market segmentation strategy may negatively impact our operating results

Operational Risks

1. 17Interruptions and other factors affecting our supply chain may adversely affect our business
2. 18consolidation or business failures in the transportation and distribution sectors
3. 19diseases, pandemics, outbreaks and other health-related concerns
4. 20We utilize third-party vendors for certain aspects of our operations, and any material disruption in our relationships or their services may have an adverse impact on our business
5. 21We are subject to risks related to the products we sell, including those products sold on our Marketplace platforms and products under our exclusive brand labels (Best Buy Essentials, Dynex, Insignia, Modal, Platinum, Rocketfish, Yardbird and Lively brands) that could affect our operating results
6. 22failure to maintain consistent quality, availability and competitive pricing, which could have a material adverse impact on the demand for exclusive brand products and the profits we are able to generate from them
7. 23inability to source alternatives quickly enough to avoid interruptions in product supply due to disruptions, such as trade disputes or excessive tariffs
8. 24We rely heavily on our information technology systems for key business processes. Any failure or interruption in these systems could have a material adverse impact on our business
9. 25As 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 configuration and dependencies on our service providers’ cybersecurity practices
10. 26We face a heightened risk of cybersecurity attacks or data security incidents, which could have a material adverse impact on our business
11. 27Failure to prevent or effectively respond to a breach of the privacy or security of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions

Regulatory, Compliance and Legal Risks

1. 28We are subject to statutory, regulatory and legal developments that could have a material adverse impact on our business
2. 29the impact of changes in the federal government on laws, regulations and policies; and the potential for an increasing patchwork of state regulations
3. 30Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to cybersecurity and corporate responsibility and sustainability matters
4. 31Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate
5. 32difficulties encountered in exerting appropriate management oversight to operations in remote locations

Financial and Market Risks

1. 33Failure to meet any financial performance guidance or other forward-looking statements we may provide to the public could result in a decline in our stock price
2. 34Failure to effectively manage our costs could have a material adverse effect on our profitability
3. 35We are highly dependent on the cash flows and net earnings we generate during our fiscal fourth quarter, which includes the majority of the holiday shopping season
4. 36Economic, regulatory and other developments could adversely affect our ability to offer attractive promotional financing to our customers and adversely affect the profits we generate from these programs
5. 37Constraints in the capital markets or our vendor credit terms may have a material adverse impact on our liquidity
6. 38Changes in our credit ratings may limit our access to capital and materially increase our borrowing costs