Best Buy 2015 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2015 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 111

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111

Table of Contents
32
Segment Performance Summary
Domestic
The following table presents selected financial data for our Domestic segment for each of the past three fiscal years ($ in
millions):
12-Month 12-Month 11-Month
Domestic Segment Performance Summary 2015 2014 2013
Revenue $ 36,055 $35,831 $33,222
Revenue % gain (decline)(1) 0.6% 7.9 % (2.6)%
Comparable sales % gain (decline)(2) 1.0% (0.4)% (1.7)%
Gross profit $ 8,080 $ 8,274 $ 7,789
Gross profit as a % of revenue 22.4% 23.1 % 23.4 %
SG&A $ 6,639 $ 7,006 $ 6,728
SG&A as a % of revenue 18.4% 19.6 % 20.3 %
Restructuring charges $ 4 $ 123 $ 327
Goodwill impairments $ — $ — $ 3
Operating income $ 1,437 $ 1,145 $ 731
Operating income as a % of revenue 4.0% 3.2 % 2.2 %
Selected Online Revenue Data:
Online revenue as a % of total segment revenue 9.8% 8.5 % 7.2 %
Comparable online sales % gain(2) 16.7% 19.8 % 11.4 %
(1) The revenue % decline for fiscal 2013 (11-month) is compared to the 12-month fiscal year 2012.
(2) Comparable online sales gain is included in the total comparable sales gain (decline) above.
The following table reconciles our Domestic segment stores open at the end of each of the last three fiscal years:
Fiscal 2013
(11-Month) Fiscal 2014 Fiscal 2015
Total Stores
at End of
Fiscal Year Stores
Opened Stores
Closed
Total Stores
at End of
Fiscal Year Stores
Opened Stores
Closed
Total Stores
at End of
Fiscal Year
Best Buy 1,056 — (1) 1,055 — (5) 1,050
Best Buy Mobile stand-alone 409 12 (15) 406 1 (40) 367
Pacific Sales 34 — (4) 30 — (1) 29
Magnolia Audio Video 4 — — 4 — (2) 2
Total Domestic segment stores 1,503 12 (20) 1,495 1 (48) 1,448
Fiscal 2015 Results Compared With Fiscal 2014
Domestic segment revenue increased in fiscal 2015, primarily driven by comparable sales growth of 1.0%. Excluding the 0.5%
of revenue estimated benefit associated with the classification of the new mobile carrier installment billing plans, comparable
sales increased 0.5%. Online revenue was $3.5 billion, and we experienced comparable online sales growth of 16.7% due to:
(1) improved inventory availability made possible by the chain-wide rollout of our ship-from-store capability that was
completed in January 2014; (2) higher average order value; and (3) increased traffic driven by greater investment in online
digital marketing.
Fiscal 2015 was also the first full year under the credit card agreement, the term of which started in September 2013. At the
beginning of the year we estimated that we would generate $150 million to $200 million less credit card revenue in fiscal 2015.
However, revenue earned decreased by only $7 million compared to fiscal 2014, as we experienced significantly better
performance than expected, particularly in the fourth quarter. The impact of our credit card agreement on our revenue is
substantially the same as the impact on our gross profit and operating income.