Best Buy 2008 Annual Report Download - page 39

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using our employees’ unique capabilities, as well as our offerings, online services scheduling, personalized
network of vendors and other third-party providers. If we shopping options and auction and outlet sites that offer
accomplish what we have set out to do, we believe these more favorable pricing. Members of Reward Zone, our
solutions may give us something unique in the customer loyalty program, will also see increased benefits
marketplace, and something truly differentiated. and program offerings in the next year with rewards
becoming even greater the more they shop with us.
Mass merchants, direct sellers, other specialty retailers and
online retailers are increasingly interested in our revenue Our plans in fiscal 2009 also include significant
categories because of rising demand. We believe that by investments internationally as we prepare to enter Mexico
understanding our customers better than our competitors and Turkey and to expand further in China. These
do, and by inspiring our employees to have richer investments include real estate, personnel, training and
interactions with customers, we can differentiate ourselves enhanced information, supply chain and customer analytic
and compete more effectively. We further believe that this systems. Our continuing plans for international expansion
strategy can be successful for us with a variety of products have been thoughtfully managed and we plan to offer
and services, store formats, customer groups and even tailored market assortments at optimum prices in each
countries. country we enter.
We believe that our customer centricity strategy provides We anticipate expanding our private label business to
the framework to grow and to enhance our business in the other retailers internationally, including retailers in
future. Examples of new growth areas in the past year countries where we do not have a footprint presently. We
include our Best Buy Mobile and Apple store-within-a-store plan to grow and to optimize our Canada business by
experiences, our introduction of Dell computers to all implementing labor model changes at Future Shop,
U.S. Best Buy stores (making us the only U.S. retailer expanding financial services and broadening our loyalty
offering all major computing brands), our acquisition of program given the success we have had in the U.S. We
Speakeasy and our entry into Puerto Rico. believe the growth we are planning for in Canada will
help offset our international investments in fiscal 2009.
Our future growth plans include focusing on investments
Not only are we executing on organic growth drivers, we
that will quicken our progress in transforming the customer
are evaluating options to leverage our existing relationship
experience. We plan to do this by scaling the Best Buy
with CPW, as well as considering potential new
Mobile store-within-a-store experience to the majority of
relationships to support our international expansion.
our U.S. Best Buy stores in the next 18 months. In
addition, we plan to invest in approximately Results of Operations
250 additional Apple store-within-a-store locations in the
Fiscal 2008 Summary
next year and to expand our private label business, which
provides customers with an affordable alternative in • Net earnings in fiscal 2008 increased 2% to slightly
several product categories such as home theater, more than $1.4 billion, or $3.12 per diluted share,
computing and MP3. compared with nearly $1.4 billion, or $2.79 per diluted
share, in fiscal 2007. The modest increase in net
We expect to continue expanding into new product
earnings was driven by revenue growth and a decrease
categories such as musical instruments and recreation and
in our selling, general and administrative expense
plan to increase our market share in existing product
(‘‘SG&A’’) rate, offset by a decrease in our gross profit
categories such as home theater, navigation, mobile
rate and a higher effective income tax rate. The
phones and gaming by improving our in-store and online
increase in net earnings per diluted share was due
customer experiences. We plan to focus the in-store
primarily to the lower average number of shares
customer experience on customer value propositions that
outstanding, resulting from our share repurchases in
provide for better and localized product assortments and
fiscal 2008.
resets in our store lay-out that enhance and highlight
products that are generating the most customer interest • Revenue in fiscal 2008 increased 11% to $40.0 billion.
such as our offerings in gaming, navigation devices, digital The increase reflected market share gains and was
SLR cameras and computing. We expect online offerings to driven by the net addition of 137 new stores during
include greater assortments which include Best Buy Mobile fiscal 2008; a 2.9% comparable store sales gain; the
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