Best Buy 2002 Annual Report Download - page 4

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Leadership in retailing often is defined as
having the greatest market share. By that
definition, Best Buy is the leading specialty
retailer in North America, generating
revenues in fiscal 2002 of nearly $20 billion.
As a result, we have captured a 14-percent
U.S. market share of the consumer electronics,
home office and entertainment software
categories. While we continue to develop
plans to increase our market share, we
already lead the United States in sales of
consumer electronics, computers, music and
movies, and we rank third in sales of major
appliances. Through our November 2001
acquisition of Future Shop, we have expanded
our leadership position in speciality retailing
to all of North America as well.
We compare our performance with that of
the nation’s best-in-class retailers, including
Bed Bath & Beyond, Home Depot, Kohls,
Target, Wal-Mart and Walgreens. Last year,
we had one of the best performances in that
group in terms of revenue growth, sales
productivity, inventory turns, earnings growth
and return on equity.
In the past year, for example, we increased
revenues by 28 percent to $19.6 billion,
driven by the opening of 62 new Best Buy
stores, the inclusion of revenues from acquired
businesses and a comparable store sales gain
at Best Buy stores of 1.9 percent. We achieved
those results amid a national recession, the
war on terrorism and weakness in sales of
two major products, desktop computers and
prerecorded music.
Thanks to the continuing strength of our
employees’ retail execution and customer
preference for our store format, our sales
productivity at Best Buy stores reached $830
per square foot.
Despite a volatile economy, we kept Best Buy
stores’ inventory turns steady at the retail
industry-leading level of
7
.5 times, while
enhancing our in-stock position.
We achieved these results by sharpening our
supply chain management, demand forecasting,
logistics, transportation and pricing systems.
Our net earnings grew to $5
7
0 million,
reflecting increased revenues, a richer
product assortment and controlled expenses.
Our earnings growth rate exceeded
40 percent last year.
These results translated into a 26-percent
return on average equity.
Letter to Shareholders
Extending our Leadership in Retailing
2