Best Buy 2005 Annual Report Download - page 23

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The following table presents Magnolia Audio Video revenue, by product group, as a percentage of total Magnolia Audio
Video revenue:
Percentage of Total Revenue
Product Group Fiscal 2005 Fiscal 2004 Fiscal 2003
Consumer Electronics 97% 97% 96%
Home-Office 3% 3% 4%
Total 100% 100% 100%
Entertainment software products include DVDs, video
International game hardware and software, computer software and
International stores offer merchandise in four product CDs. The appliances product group includes major
groups: consumer electronics, home-office, entertainment appliances as well as small electrics, vacuums and
software and appliances. Consumer electronics, the housewares. Canadian Best Buy stores do not carry
largest product group for fiscal 2005 based on revenue, appliances.
consists of video and audio products. Video products Although the two store brands of our International
include televisions, digital cameras, DVD players, digital segment carry similar product categories, there are
camcorders and accessories. Audio products include MP3 differences in product brands and depth of selection
players, home audio components, car stereos, speakers within product categories. On average, approximately
and accessories. The home-office product group includes 45% of the product assortment (excluding entertainment
desktop and notebook computers, telephones and software) overlaps between the two store brands.
accessories.
The following table presents International revenue, by product group, as a percentage of total International revenue:
Percentage of Total Revenue
Product Group Fiscal 2005 Fiscal 2004 Fiscal 2003
Consumer Electronics 41% 40% 38%
Home-Office 40% 40% 42%
Entertainment Software 15% 15% 15%
Appliances 4% 5% 5%
Total 100% 100% 100%
Note: The above revenue mix table reflects the reclassification of MP3 players into the consumer electronics product group from the
home-office product group.
are dependent upon the distribution centers for inventory
Distribution storage and shipment of most merchandise. However, in
U.S. Best Buy order to meet release dates for selected products and to
improve inventory management, certain merchandise is
Generally, U.S. Best Buy stores’ merchandise, except for
shipped directly to the stores from manufacturers and
major appliances and large-screen televisions, is shipped
distributors. All inventory is bar-coded and scanned to
directly from manufacturers to our distribution centers
ensure accurate tracking. In addition, a computerized
located in California, Georgia, Indiana, Minnesota, New
inventory replenishment program is used to manage
York, Ohio, Oklahoma and Virginia. Major appliances
inventory levels at each store. On average, U.S. Best Buy
and large-screen televisions are shipped to satellite
stores receive product shipments two or three times a
warehouses in each major market. U.S. Best Buy stores
7