Best Buy 2011 Annual Report Download - page 47

margins in all product categories, especially mobile computing and entertainment hardware and software. In addition,
restructuring charges in fiscal 2011 had an unfavorable impact of 0.1% of revenue.
In fiscal 2011, our International segment’s SG&A increased $104 million, or 3.5%, driven primarily by the unfavorable
impact of foreign currency exchange rate fluctuations and increased spending associated with new store openings across
the segment, partially offset by a decrease in Europe due to the higher Best Buy Mobile profit share-based management
fee. Excluding the impact of foreign currency exchange rate fluctuations, our International segment’s SG&A increased
$35 million. The 0.5% of revenue improvement in the SG&A rate was driven primarily by a rate decline in Europe due to
the higher Best Buy Mobile profit share-based management fee and the favorable mix impact from both growth in our
lower-rate China business and a decrease in the sales mix of our higher-rate Europe business. These improvements were
partially offset by a rate increase in Canada caused by the deleveraging impact of its comparable store sales decline and
increased advertising costs to drive traffic.
The decrease in our International segment’s operating income in fiscal 2011 resulted primarily from higher restructuring
charges and costs associated with the operation of new large-format stores in Europe, China, Mexico and Turkey, partially
offset by higher operating income in Europe and from Five Star. Our International segment’s operating income in fiscal
2011 included $171 million of restructuring charges recorded in the fourth fiscal quarter, compared to $27 million of
restructuring charges recorded in fiscal 2010. The fiscal 2011 restructuring charges primarily related to inventory write-
downs, property and equipment impairments, employee termination benefits and facility closure costs as a result of our
plans to exit the Turkey market and restructure the Best Buy branded stores in China. The fiscal 2010 restructuring charges
were related primarily to employee termination benefits and business reorganization costs at Best Buy Europe.
Fiscal 2010 Results Compared With Fiscal 2009
The 24.5% increase in revenue for fiscal 2010 was due to the inclusion of Best Buy Europe, which contributed no revenue
in the first six months of fiscal 2009 and $2.6 billion of revenue in the first six months of fiscal 2010, and the impact of
net new stores opened during fiscal 2010, partially offset by the comparable store sales decline of 3.7% and decreases in
our non-comparable sales channels. The decrease in comparable store sales was the result of a comparable store sales
decline in Canada, partially offset by comparable store sales gains in Europe and China. Fluctuations in foreign currency
exchange rates did not have a significant impact on revenue for fiscal 2010.
The components of the net revenue increase in fiscal 2010 were as follows:
Acquisition of Best Buy Europe 25.8%
Net new stores 3.5%
Impact of foreign currency 0.4%
Comparable store sales impact (3.3)%
Non-comparable sales channels(1) (1.9)%
Total revenue increase 24.5%
(1) Non-comparable sales channels primarily reflects the impact from revenue we earn from sales of merchandise to wholesalers and
dealers as well as other non-comparable sales channels not included within our comparable store sales calculation.
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