Best Buy 2004 Annual Report Download

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Fiscal 2004 Annual Report
Best Buy Co., Inc. Fiscal 2004 Annual Report

Table of contents

  • Page 1
    Fiscal 2004 Annual Report

  • Page 2
    ... teams worked closely together to get the right products to the stores and to sell them successfully. As a result, we gained market share and increased revenue and earnings. We also returned value to our shareholders by instituting our first cash dividend and reactivating our share buyback program...

  • Page 3
    ... our direct sourcing capability and re-engineering our supply chain and customer contact centers to be much more customer-driven. • Expand the value-added services we can offer to customers, principally through the roll out of Geek Squad's® rapid-response, in-store and in-home computer support...

  • Page 4
    ... to tailor stores to local customers' needs. We see new services that no other North American retailer can offer. We see possibilities for connecting more closely with customers through the entertainment they love. We see a more flexible and more productive way to operate that can help us anticipate...

  • Page 5
    ... the competition more powerful, but the rules will have changed ...because we are changing them. At Best Buy, we see a very different consumer electronics business in the future. This future has critical implications for our customers and for our company. Key products are converging, which works to...

  • Page 6
    ... in 1986. "Nobody will buy high-end consumer electronics from noncommissioned sales associates," they said in 1989. "Retailers can't make money selling computers," they said in 1997. "Dual branding works only with consumer products," they said in 2000. Each time we challenged the status quo, and by...

  • Page 7
    ... product groups that are key to our success. Customer loyalty, customer satisfaction, brand awareness and employee attitude measures all are at all-time highs for us. We have positive momentum. tation will continue, in the coming year we plan to convert up to 110 additional U.S. Best Buy stores...

  • Page 8
    ... social customer, time-starved mom, affluent professional, family man Customer centricity is a new approach to serving our customers. In fiscal 2004, we identified customer segments with specific needs for which we believe Best Buy can find solutions and tailored 32 pilot stores to meet those needs...

  • Page 9
    ... recall scores of any Best Buy advertising ever. The new advertisements, "Thousands of possibilities. Get yours," showed how our employees seek to understand each customer's unique needs before suggesting products and services. We also successfully launched Reward Zone, our customer loyalty program...

  • Page 10
    ... from Asian manufacturers. We expect this office will help Best Buy increase efficiency by reducing our cost of goods sold and providing us with a direct vehicle for giving manufacturers our customers' feedback on new and existing products. In addition, the office provides us with the capability to...

  • Page 11
    ...-on-one service. A small-business owner came into a Best Buy store to purchase an MP3 player. After a store employee talked with him about the opportunities offered by Best Buy for Business, he bought several computers and hired the Geek Squad® to set up a network and provide computer training. He...

  • Page 12
    ... to guide their purchases. The Geek Squad agents are a rapid-response computer support task force with precincts in our stores that can dispatch agents to customers' homes and businesses. Together, our team can help consumers purchase, install, connect and use their technology for maximum enjoyment...

  • Page 13
    ... locations. Increasingly, customers are networking their technology products throughout their homes, so in fiscal 2004 we expanded the number of markets patrolled by Geek Squad agents to a total of seven markets. This premier 24-hour installation and repair task force features in-home service...

  • Page 14
    ... share. Our two Canadian brands have different operating models and cater to distinct customer groups. For example, Future Shop associates are paid commissions, so the customer experience is directed by the salesperson, who expertly demonstrates the products. Best Buy associates are non-commissioned...

  • Page 15
    ... satellite radio; and magazine subscriptions. In fiscal 2004, we helped launch the music downloading services Rhapsody and Napster2, which enable consumers to obtain music legally through the Internet. To make our customers' consumer electronics products more fun and easier to use, we plan to expand...

  • Page 16
    ... customer transactions include entertainment software-a CD, DVD, video game or computer program. Because we are committed to delivering entertainment to our customers in whatever form they choose, we expanded our assortment of DVDs and CDs and introduced two music downloading services in our stores...

  • Page 17
    ... through the Best Buy Children's Foundation. The Foundation is devoted to making learning interactive and fun by supporting innovative, high-tech programs that engage and educate elementary and secondary students. A school grant program called Te@ch, electronic field trips and scholarships are...

  • Page 18
    ... and paid 0.40 62.70 Common stock price: High 25.55 Low Operating Statistics 7.1% Comparable store sales change(5) Gross profit rate 25.2% 19.9% Selling, general and administrative expense rate 5.3% Operating income rate Year-End Data $ 1,223 Working capital(6) 8,652 Total assets(6) 850 Long-term...

  • Page 19
    ... years have not been computed using the refined methodology. Refining the methodology for calculating our comparable store sales percentage change did not impact previously reported revenue, earnings or cash flows. (6) Includes both continuing and discontinued operations. Best Buy Co., Inc. 17

  • Page 20
    ..." in the Investor Relations section of our Web site at www.BestBuy.com. The Investor Relations section of our corporate Web site also includes information about our strategic planning process, a copy of our proxy statement and other information. Richard M. Schulze e Director since 1966 Best Buy Co...

  • Page 21
    ... TVs, DVD players, speakers, cameras, camcorders, car stereos, home theater systems, shelf systems, personal portables, satellite systems and accessories cost of goods sold includes the wholesale price of a product plus the cost of transporting the product to the distribution center and any sales...

  • Page 22
    ... home-theater-in-a-box international segment includes the results of Future Shop and Best Buy stores in Canada ISP Internet service provider in-stock position the number of SKUs available for purchase in the stores at a given time, compared with the planned merchandise assortment for that location...

  • Page 23
    ... (2) Tax expense calculated using effective tax rates for FY 2004 (38.3%), FY 2003 (38.7%) and FY 2002 (38.4%) (3) Long-Term Debt plus current portion of convertible debt, as applicable (4) Capitalized Operating Leases, net of Cash & Cash Equivalents in excess of $300 million Best Buy Co., Inc. 21

  • Page 24
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  • Page 25
    ... Group, Inc. 6.5 million shares T. Rowe Price 5.2 million shares. Independent Auditors Ernst & Young LLP Annual Shareholders' Meeting June 24, 2004, at 10 a.m. (CDT) Best Buy Corporate Campus - Theater 7601 Penn Avenue South Richfield, MN 55423-3645 If you have a proposal for a future meeting...

  • Page 26
    Best Buy Co., Inc. 7601 Penn Avenue South • Richfield, MN 55423-3645 (612) 291-1000 • www.BestBuy.com • NYSE symbol: BBY © 2004 Best Buy Co., Inc.