Best Buy 2008 Annual Report Download - page 48

Our International segment’s SG&A rate in fiscal 2008 was due primarily to the leveraging effect of the 37%
decreased by 1.3% of revenue to 18.3% of revenue. Our growth in revenue and continued focus on SG&A
China operations, which carry a significantly lower SG&A optimization initiatives. Partially offsetting the decrease
rate than our Canada operations, reduced our were continued costs incurred for infrastructure investments
International segment’s SG&A rate by approximately 0.5% in China, the build-out of an international support team
of revenue in fiscal 2008. The remainder of the and the start-up costs for entry into Mexico and Turkey.
improvement in our International segment’s SG&A rate
The following table reconciles International stores open at the beginning and end of fiscal 2008:
Total Total
Stores at Stores at
End of Stores Stores Stores End of
Fiscal 2007 Opened Acquired Closed Fiscal 2008
Future Shop 121 10 — — 131
Canada Best Buy 47 4 — — 51
Five Star 135 31 — (6) 160
China Best Buy 1 — — — 1
Total International stores 304 45 — (6) 343
Note: During fiscal 2008, we relocated one Future Shop store. No other store in the International segment was relocated during fiscal
2008. At the end of fiscal 2008, we operated 131 Future Shop stores throughout all of Canada’s provinces; 51 Canada Best Buy stores
in Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec and Saskatchewan; 160 Five Star stores throughout seven of
China’s 34 provinces; and one China Best Buy store in Shanghai.
The following table reconciles International stores open at the beginning and end of fiscal 2007:
Total Total
Stores at Stores at
End of Stores Stores Stores End of
Fiscal 2006 Opened Acquired Closed Fiscal 2007
Future Shop 118 3 — — 121
Canada Best Buy 44 3 — — 47
Canada Geek Squad 5 1 — (6) —
Five Star — 8 131 (4) 135
China Best Buy — 1 — — 1
Total International stores 167 16 131 (10) 304
Note: During fiscal 2007, we relocated four Future Shop stores and three Five Star stores. No other store in the International segment
was relocated during fiscal 2007. At the end of fiscal 2007, we operated 121 Future Shop stores throughout all of Canada’s provinces;
47 Canada Best Buy stores in Ontario, Quebec, Alberta, British Columbia, Manitoba and Saskatchewan; 135 Five Star stores throughout
seven of China’s 34 provinces; and one China Best Buy store in Shanghai.
reduction in the SG&A rate. These factors were partially
Fiscal 2007 Results Compared With Fiscal 2006
offset by a decrease in the gross profit rate.
Fiscal 2007 amounts have been adjusted to conform to
Our International segment’s revenue increased 41% to
the current-year presentation, which allocates to the
$4.9 billion in fiscal 2007, compared with $3.5 billion in
International segment certain SG&A support costs
fiscal 2006. The acquisition of Five Star accounted for
previously reported as part of the Domestic segment.
nearly four-tenths of the revenue increase in fiscal 2007;
In fiscal 2007, our International segment’s operating the 11.7% comparable store sales gain accounted for
income was $99 million, or 2.0% of revenue, compared nearly three-tenths of the revenue increase; the addition of
with $56 million, or 1.6% of revenue, in fiscal 2006. The new Best Buy and Future Shop stores during the past two
increase in our International segment’s operating income fiscal years accounted for just over one-tenth of the
resulted primarily from revenue gains and a significant revenue increase; fluctuations in foreign currency exchange
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