Best Buy 2014 Annual Report Download - page 39

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34
In fiscal 2013 (11-month), we experienced sales growth in mobile phones and tablets due to continued demand for these
products as new technology is introduced. We also experienced sales growth in appliances, primarily from the introduction of
additional Pacific Kitchen and Home store-within-a-store locations. However, these increases were more than offset by
decreases in other product categories, such as gaming, computers, digital imaging and televisions. Certain of these products (in
particular, compact cameras and camcorders and gaming) have faced declining demand due in part to the inclusion of their key
features in new products, such as smartphones and tablets. In addition, the net impact from the closure of 47 large-format stores
in fiscal 2013 (11-month) contributed to the overall revenue decline.
The components of the 2.6% revenue decrease in the Domestic segment in fiscal 2013 (11-month) were as follows:
Comparable store sales impact (1.6)%
Net new stores (1.0)%
Total revenue decrease (2.6)%
The impact of net store changes on our revenue is a result of store opening and closing activity during the past 11 months, as
well as stores opened in the prior year that are not included in comparable store sales due to the timing of their opening. The
decrease in large-format Best Buy branded stores contributed to the majority of the total decrease in revenue associated with
net store changes in fiscal 2013 (11-month) compared to the comparable prior-year period. The addition of small-format Best
Buy Mobile stand-alone stores partially offset the decrease, as the proportion contributed to revenue is smaller due to their
smaller square footage and limited category focus compared to our large-format stores.
The following table presents the Domestic segment's revenue mix percentages and comparable store sales percentage changes
by revenue category in fiscal 2013 (11-month) and 2012 (11-month recast):
Revenue Mix Summary Comparable Store Sales Summary
11 Months Ended 11 Months Ended
February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012
Consumer Electronics(1) 32% 34% (8.0)% (8.6)%
Computing and Mobile Phones(1) 45% 42% 7.4 % 9.1 %
Entertainment 10% 12% (21.4)% (16.0)%
Appliances 6% 5% 10.1 % 10.6 %
Services 6% 6% 0.8 % (0.1)%
Other 1% 1% n/a n/a
Total 100% 100% (1.7)% (1.6)%
(1) In fiscal 2014, e-Readers were moved from the "Consumer Electronics" revenue category to "Computing and Mobile Phones" to reflect the continued
convergence of their features with tablets and other computing devices.
The following is a description of the notable comparable store sales changes in our Domestic segment by revenue category:
• Consumer Electronics: The 8.0% comparable store sales decline was primarily driven by a decrease in the sales of
digital imaging products, particularly compact cameras and camcorders, partially due to convergence with
smartphones. In addition, we experienced a decrease in television revenue due primarily to a decrease in average
selling price from an increased sales mix of small and mid-sized televisions.
• Computing and Mobile Phones: The 7.4% comparable store sales gain resulted primarily from increased sales of
mobile phones due to an increased mix of higher-priced smartphones and new product launches, as well as increased
sales of tablets and e-Readers driven by new product launches, consumer demand and continued expansion of
available platforms. The strong performance from mobile phones, tablets and e-Readers was partially offset by a
decline in sales of notebook and desktop computers.
• Entertainment: The 21.4% comparable stores sales decline was mainly the result of a decline in gaming due to aging
gaming platforms, fewer new software releases and the migration of casual gamers to other platforms, such as tablets
and smartphones.
• Appliances: The 10.1% comparable store sales gain was due to the implementation of operational improvements,
including the addition of more Pacific Kitchen and Home store-within-a-store concepts, promotional effectiveness and
improved performance in small appliances.