Best Buy 2011 Annual Report Download - page 41

The 0.3% revenue decline in fiscal 2011 was due primarily to a comparable store sales decline of 3.0%, partially offset by
the impact of net new stores opened during fiscal 2011. The components of the net revenue decrease in the Domestic
segment in fiscal 2011 were as follows:
Comparable store sales impact (2.9)%
Non-comparable sales channels(1) (0.1)%
Net new stores 2.7%
Total revenue decrease (0.3)%
(1) Non-comparable sales channels reflects the impact from revenue we earn from sales channels not included within our comparable
store sales calculation.
The following table presents the Domestic segment’s revenue mix percentages and comparable store sales percentage
changes by revenue category in fiscal 2011 and 2010:
Revenue Mix Summary Comparable Store Sales Summary
Year Ended Year Ended
February 26, 2011 February 27, 2010 February 26, 2011 February 27, 2010
Consumer electronics 37% 39% (6.3)% 1.1%
Home office 37% 34% 3.6% 12.8%
Entertainment 14% 16% (13.3)% (13.2)%
Appliances 5% 4% 7.0% (4.2)%
Services 6% 6% 0.5% (1.1)%
Other 1% 1% n/a n/a
Total 100% 100% (3.0)% 1.7%
The products having the largest impact on our comparable store sales decline in fiscal 2011 were entertainment hardware
and software (which includes video gaming hardware and software, CDs and DVDs) and televisions. Comparable store
sales gains in mobile phones, mobile computing (consisting of notebook computers, netbooks and tablets) partially offset
these declines. Revenue from our Domestic segment’s online operations increased 13% in fiscal 2011 and is incorporated
in the table above.
The 6.3% comparable store sales decline in the consumer electronics revenue category was driven primarily by a decrease
in the sales of televisions and cameras and camcorders, partially offset by strong sales from our expanded assortment of
e-Readers. The 3.6% comparable store sales gain in the home office revenue category was primarily the result of
increased sales of mobile phones due to the continued growth of Best Buy Mobile, as well as gains in the sales of mobile
computing. The 13.3% comparable store sales decline in the entertainment revenue category was mainly the result of
declining sales in video gaming hardware and software, partially caused by industry-wide softness combined with a decline
in our market share, as well as the continued decline in the sales of DVDs and CDs as consumers shift to digital content.
The 7.0% comparable store sales gain in the appliances revenue category was due to an increase in unit sales with
relatively flat average selling prices, with particular strength in kitchen and small appliances. The 0.5% comparable store
sales gain in the services revenue category was due primarily to a gain in the sales of computer services, partially offset by
a decline in the sales of repair and home theater installation services, due in part to the decrease in television sales noted
above.
Despite a modest decline in revenue, our Domestic segment experienced gross profit growth in fiscal 2011 of
$324 million, or 3.6%, compared to fiscal 2010, due to rate improvements. The 0.9% of revenue increase in the gross
profit rate was due to favorable rate and mix impacts of 0.7% of revenue and 0.2% of revenue, respectively, and resulted
primarily from the following factors collectively:
• increased sales of higher-margin mobile phones as a result of the growth in Best Buy Mobile;
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