Best Buy 2015 Annual Report Download - page 44

Table of Contents
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The net closure of large-format stores in Canada over the past 12 months contributed to the decrease in revenue associated with
net store changes in our International segment in fiscal 2015. The addition of large and small-format stores in Mexico partially
offset this decrease.
The following table presents the International segment's revenue mix percentages and comparable store sales percentage
changes by revenue category in fiscal 2015 and 2014:
Revenue Mix Summary Comparable Store Sales Summary
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
January 31, 2015 February 1, 2014 January 31, 2015 February 1, 2014
Consumer Electronics 30% 29% (5.1)% (9.7)%
Computing and Mobile Phones 49% 50% (2.8)% (1.7)%
Entertainment 9% 10% (5.2)% (9.3)%
Appliances 5% 5% (0.5)% (1.5)%
Services 6% 6% (4.7)% (6.3)%
Other 1% <1% n/a n/a
Total 100% 100% (3.5)% (5.1)%
The following is a description of the notable comparable sales changes in our International segment by revenue category:
• Consumer Electronics: The 5.1% comparable sales decline was driven primarily by a decrease in sales of digital
imaging products, televisions and MP3 devices. The declines in digital imaging products and MP3 devices were a
result of device convergence and industry declines. The decrease in sales of televisions was due to overall market
softness across the segment and competitive pressures in Canada.
• Computing and Mobile Phones: The 2.8% comparable sales decline was caused primarily by a decrease in sales of
tablets due to industry declines, partially offset by increased mobile phone sales.
• Entertainment: The 5.2% comparable sales decline was driven by a decrease in sales of movies and music as
customers continue to shift from physical media to digital consumption, partially offset by gaming sales in Canada due
to the release of new gaming platforms in the fourth quarter of fiscal 2014.
• Appliances: The 0.5% comparable sales decline was driven by Mexico due to a decrease in sales of kitchen
appliances, partially offset by appliance sales increases in Canada from expansion of offerings and assortment.
• Services: The 4.7% comparable sales decline was due to a decrease in sales of warranties in Canada driven by the
overall comparable store sales decline in applicable hardware, particularly tablets and televisions.
Our International segment experienced a gross profit decline of $158 million, or 14.0%, in fiscal 2015 compared to fiscal 2014.
Excluding the impact of foreign currency exchange rate fluctuations, the decrease in gross profit was $88 million. The gross
profit rate decline of 0.9% of revenue was driven by Canada due to increased promotional activity and, to a lesser extent,
higher revenue in the lower-margin gaming category.
Our International segment's SG&A decreased $147 million, or 13.4%, in fiscal 2015 compared to the prior year. Excluding the
impact of foreign currency exchange rate fluctuations, the decrease in SG&A was $81 million. In addition, the SG&A rate
decreased by 0.8% of revenue in fiscal 2015. The decrease in SG&A and SG&A rate was primarily driven by Renew Blue cost
reductions and store closures in Canada.
Our International segment recorded $1 million of restructuring charges in fiscal 2015 and incurred $26 million of restructuring
charges in fiscal 2014. The restructuring charges had an immaterial impact on our operating income rate in fiscal 2015 and
resulted in a decrease in our operating income rate in fiscal 2014 of 0.5% of revenue. Refer to Note 4, Restructuring Charges,
of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this
Annual Report on Form 10-K for further information about our restructuring activities.
Our International segment operating income of $13 million in fiscal 2015 compared to a loss of $1 million in the prior-year
period. The improvement in operating income was driven primarily by a decrease in SG&A, partially offset by a decrease in
gross profit as described above.