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Earnings from continuing operations were $522 million, Reward Zone certificates following the holiday selling
or $1.55 per diluted share, for the fourth quarter of fiscal season. Products that had the largest impact on our fiscal
2005, an increase of 11% compared with $469 million, fourth-quarter comparable store sales gain included
or $1.40 per diluted share, for the fourth quarter of fiscal digital televisions, MP3 players, notebook computers,
2004. The improvement was driven by a 9% increase in digital cameras, DVDs and appliances.
revenue, including a comparable store sales gain of 2.8%, Our gross profit rate for the fourth quarter of fiscal 2005
and a decrease in our SG&A rate, and was partially decreased by 0.7% of revenue to 23.5% of revenue,
offset by a decrease in our gross profit rate. In addition, down from 24.2% of revenue for the fourth quarter of
earnings from continuing operations for the fourth quarter fiscal 2004. The decline was due primarily to a less
of fiscal 2005 benefited from a lower effective income tax profitable revenue mix resulting from increased sales of
rate due to the resolution and clarification of outstanding MP3 players, DVDs and notebook computers, as these
income tax matters. products carry a lower gross profit rate. In addition, the
Revenue for the fourth quarter of fiscal 2005 increased gross profit rate for the fiscal fourth quarter was adversely
9% to $9.2 billion, compared with $8.4 billion for the affected by increased promotional activity compared with
fourth quarter of the prior fiscal year. Revenue from our the fourth quarter of fiscal 2004, as well as the impact of
Domestic and International segments increased 8% and product model transitions which resulted in increased
20%, respectively, for the fourth quarter of fiscal 2005 markdowns. These factors were partially offset by the
compared with the same period of the prior year. The increase of services revenue in the revenue mix, as
addition of 78 stores in the past 12 months accounted for services carry a higher gross profit rate, and benefits
approximately three-fifths of the revenue increase for the from our global sourcing initiative which, reduces the cost
quarter. Approximately three-tenths of the increase in of acquiring merchandise.
revenue was due to the 2.8% comparable store sales Our SG&A rate for the fourth quarter of fiscal 2005
gain. The remainder of the revenue increase was due to improved by 0.3% of revenue to 15.0% of revenue, down
the favorable effect of fluctuations in foreign currency from 15.3% of revenue for the fourth quarter of fiscal
exchange rates. 2004. The improvement was driven primarily by lower
We believe our comparable store sales performance for performance-based incentive compensation costs,
the fourth quarter of fiscal 2005 reflected improved including a change in the vesting assumptions which are
in-store execution, including our ability to increase the based on the performance of our stock compared with
close rate and average ticket, which more than offset companies that comprise the Standard & Poor’s 500
customer traffic declines in our stores. In addition, our Index. In addition, our SG&A rate benefited from a
comparable store sales for the fiscal fourth quarter favorable settlement with a credit card company. These
benefited from our effective advertising and promotional factors were partially offset by a fourth-quarter charge to
campaigns, as well as the redemption of gift cards and correct our accounting for leases.
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