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38
The components of the International segment's 26.2% revenue decrease in fiscal 2016 were as follows:
Non-comparable sales(1) (13.7)%
Impact of foreign currency exchange rate fluctuations (12.5)%
Total revenue decrease (26.2)%
(1) Non-comparable sales reflects the impact of net store opening and closing activity, including the Canadian brand consolidation activity, as well as the
impact of revenue streams not included within our comparable sales calculation, such as certain credit card revenue, gift card breakage and sales of
merchandise to wholesalers and dealers, as applicable.
The following table presents the International segment's revenue mix percentages by revenue category in fiscal 2016 and 2015:
Revenue Mix Summary
Year Ended
January 30, 2016 January 31, 2015
Consumer Electronics 31% 30%
Computing and Mobile Phones 48% 49%
Entertainment 9% 9%
Appliances 5% 5%
Services 6% 6%
Other 1% 1%
Total 100% 100%
As noted above, comparable sales information has not been provided for the International segment for fiscal 2016 due to the
Canadian brand consolidation. As such, it is also impractical to provide such information on a revenue category basis.
However, as noted above, the revenue mix by category has not changed significantly from fiscal 2015.
Our International segment experienced a gross profit decline of $260 million, or 26.9%, in fiscal 2016 compared to fiscal 2015.
Excluding the impact of foreign currency exchange rate fluctuations, the decrease in gross profit was $141 million. The gross
profit rate declined to 22.4% of revenue in fiscal 2016 from 22.6% of revenue in fiscal 2015. This decline was primarily due to
the disruptive impacts from the Canadian brand consolidation and increased promotional activity in Canada.
Our International segment's SG&A decreased $232 million, or 24.3%, in fiscal 2016 compared to the prior year. Excluding the
impact of foreign currency exchange rate fluctuations, the decrease in SG&A was $115 million. However, the SG&A expense
rate increased to 22.8% of revenue in fiscal 2016 from 22.2% of revenue in fiscal 2015. The decrease in SG&A expense was
driven by the elimination of expenses associated with closed stores as part of the Canadian brand consolidation. The increase in
the SG&A rate was driven by year-over-year sales deleverage.
Our International segment recorded $199 million of restructuring charges in fiscal 2016 and incurred $1 million of restructuring
charges in fiscal 2015. The fiscal 2016 restructuring charges primarily related to the Canadian brand consolidation and
consisted of facility closure costs, tradename impairments, property and equipment impairments, and employee termination
benefits. The restructuring charges in fiscal 2015 had an immaterial impact on our operating income rate. 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 loss of $210 million in fiscal 2016 compared to income of $13 million in the prior-year
period. The decline in operating income was driven primarily by a decrease in revenue and gross profit rate and restructuring
charges, partially offset by lower SG&A expenses as described above.
Fiscal 2015 Results Compared With Fiscal 2014
Our international segment experienced a decrease in revenue of 10.4% primarily driven by the negative impact of foreign
currency exchange rate fluctuations, a comparable sales decline of 3.5%, and the loss of revenue from store closures in Canada.