Best Buy 2015 Annual Report Download - page 15

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Table of Contents
8
Nominating, Corporate Governance and Public Policy Committee. These documents are posted on our website at
www.investors.bestbuy.com.
Copies of any of the above-referenced documents will also be made available, free of charge, upon written request to Best Buy
Co., Inc. Investor Relations Department at 7601 Penn Avenue South, Richfield, MN 55423-3645.
Item 1A. Risk Factors.
Described below are certain risks that we believe apply to our business and the industry in which we operate. You should
carefully consider each of the following risk factors in conjunction with other information provided in this Annual Report on
Form 10-K and in our other public disclosures. The risks described below highlight potential events, trends or other
circumstances that could adversely affect our business, financial condition, results of operations, cash flows, liquidity or access
to sources of financing, and consequently, the market value of our common stock and debt instruments. These risks could cause
our future results to differ materially from historical results and from guidance we may provide regarding our expectations of
future financial performance. The risks described below are not an exhaustive list of all the risks we face. There may be others
that we have not identified or that we have deemed to be immaterial. All forward-looking statements made by us or on our
behalf are qualified by the risks described below.
We face strong competition from traditional store-based retailers, multi-channel retailers, internet-based businesses, our
vendors and other forms of retail commerce, which directly affects our sales and margins.
The retail business is highly competitive. Price is of primary importance to customers and price transparency and comparability
continues to increase, particularly as a result of digital technology. The ability of consumers to compare prices on a real-time
basis puts additional pressure on us to maintain competitive prices to attract customers. We compete with many other local,
regional, national and international retailers, as well as certain of our vendors who offer their products directly to consumers.
Some of our competitors have greater market presence and financial resources than we do. The retail industry continues to
experience a trend toward an increase in sales initiated online and using mobile applications, and some online-only businesses
are not required to collect and remit sales taxes in all U.S. states, which can negatively impact the ability of multi-channel
retailers to be price competitive. Online and multi-channel retailers are also increasing their focus on delivery services, with
customers increasingly seeking faster, guaranteed delivery times and low-price or free shipping. Our ability to be competitive
on delivery times and delivery cost depends on many factors, and our failure to successfully manage these factors and offer
competitive delivery options could negatively impact the demand for our products. In addition, because our business strategy is
based on offering superior levels of customer service utilizing a multi-channel platform, our cost structure is higher than some
of our competitors. Changes in the levels of these various competitive factors may have a significant impact on consumer
demand for our products and services and the margins we can generate from them.
Failure to anticipate and respond to changing consumer preferences in a timely manner could result in a decline in our
sales.
Our success depends on our vendors' and our ability to successfully introduce new products, services and technologies to
consumers, including, among other factors, the frequency of product and service innovations, how accurately we predict
consumer preferences, the level of consumer demand, the availability of merchandise, the related impact on the demand for
existing products and the competitive environment. Consumers continue to have a wide variety of choices in terms of how and
where they purchase the products and services we sell. Failure to accurately predict and adapt to constantly changing
technology and consumer preferences, spending patterns and other lifestyle decisions, could have a material adverse effect on
our revenues and results of operations.
Macroeconomic pressures in the U.S. and key international markets could adversely affect consumer spending and our
financial results.
Some of our products and services are viewed by some consumers to be discretionary items rather than necessities. As a result,
our results of operations are sensitive to changes in macroeconomic conditions that impact consumer spending. Consumer
confidence, employment levels, oil prices, interest rates, tax rates, availability of consumer financing, housing market
conditions, and costs for items such as fuel and food, can adversely affect consumers' demand for the products and services that
we offer. Our future results could be significantly adversely impacted by these factors.