Best Buy 2008 Annual Report Download - page 41

diluted share was due primarily to the lower average was due primarily to the favorable effect of fluctuations in
number of shares outstanding, resulting from our share foreign currency exchange rates. Excluding the impact of
repurchases in fiscal 2008. the extra week in fiscal 2007, the net addition of new
stores during the past fiscal year accounted for more than
Revenue in fiscal 2008 increased 11% to $40.0 billion, one-half of the revenue increase in fiscal 2008; the
compared with $35.9 billion in fiscal 2007. The increase comparable store sales gain accounted for more than
resulted primarily from the net addition of 137 new Best two-tenths of the revenue increase; the non-comparable
Buy, Future Shop, Five Star, Pacific Sales and Best Buy store sales generated from the acquisition of Five Star,
Mobile stores during fiscal 2008, a full year of revenue Pacific Sales and Speakeasy accounted for more than
from new stores added in fiscal 2007, a 2.9% comparable one-tenth of the revenue increase; and the remainder of
store sales gain and the non-comparable store sales the revenue increase was due to the favorable effect of
generated from the acquisition of Five Star, Pacific Sales fluctuations in foreign currency exchange rates.
and Speakeasy. The remainder of the revenue increase
The following table presents consolidated revenue mix percentages and comparable store sales percentage changes by
revenue category in fiscal 2008 and 2007:
Revenue Mix Summary Comparable Store Sales Summary(1)
Year Ended Year Ended
March 1, 2008 March 3, 2007 March 1, 2008 March 3, 2007
Consumer electronics 41% 42% (1.3)% 9.1%
Home office 28% 27% 7.1% 0.0%
Entertainment software 19% 18% 7.9% 3.2%
Appliances 6% 6% (2.6)% (0.8)%
Services(2) 6% 6% 5.5% 9.5%
Other(3) <1% <1% n/a n/a
Total 100% 100% 2.9% 5.0%
(1) Comprised of revenue at stores, call centers and Web sites operating for at least 14 full months, as well as remodeled and
expanded locations. Relocated stores are excluded from the comparable store sales calculation until at least 14 full months after
reopening. Acquired stores are included in the comparable store sales calculation beginning with the first full quarter following the
first anniversary of the date of acquisition. The calculation of the comparable store sales percentage gain excludes the effect of
fluctuations in foreign currency exchange rates. All comparable store sales percentage calculations reflect an equal number of
weeks. The method of calculating comparable store sales varies across the retail industry. As a result, our method of calculating
comparable store sales may not be the same as other retailers’ methods.
(2) Services consists primarily of commissions from the sale of extended service contracts; revenue from computer-related services;
product repair revenue; and delivery and installation revenue derived from home theater, mobile audio and appliances.
(3) Other includes revenue, such as fees received from cardholder account activations, that is recognized over time, resulting in revenue
recognition that is not indicative of sales activity in the current period. Other also includes gift card breakage. These revenue types
are excluded from our comparable store sales calculation. Finally, other includes revenue from the sale of products that are not
related to our core offerings. For these reasons, we do not provide a comparable store sales metric for this revenue category.
Our comparable store sales gain in fiscal 2008 benefited Our gross profit rate in fiscal 2008 decreased by 0.5% of
from a higher average transaction amount driven by the revenue to 23.9% of revenue. The decrease was due
continued growth in higher-ticket items, including video primarily to increased sales of lower-margin products,
gaming hardware, flat-panel televisions and notebook including increased revenue from notebook computers and
computers. Products having the largest impact on our video gaming hardware. Our China operations, which
fiscal 2008 comparable store sales gain included video carry a significantly lower gross profit rate than our other
gaming hardware and software, notebook computers, operations, reduced our gross profit rate in fiscal 2008 by
flat-panel televisions and navigation products. An increase approximately 0.2% of revenue. These factors were
in online purchases also contributed to the fiscal 2008 partially offset by better promotional programs in home
comparable store sales gain. Revenue from our online theater, as well as lower financing rates and Reward Zone
operations increased more than 25% in fiscal 2008 and costs.
added to the overall comparable store sales increase.
33