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Table of Contents
38
Fiscal 2014 (12-month) Results Compared With Fiscal 2013 (11-month)
For purposes of this section, fiscal 2014 (12-month) represents the 12-month period ended February 1, 2014 and fiscal 2013
(11-month) represents the 11-month transition period ended February 2, 2013.
In fiscal 2014 (12-month), we experienced a comparable sales decline in Canada, as sales were negatively impacted by lower
industry demand for consumer electronics. We also started to implement our Renew Blue initiatives in our International
segment in fiscal 2014 (12-month). While our International segment continues to experience revenue and gross profit
challenges, we have made progress in stabilizing comparable sales and reducing SG&A expenses. Increased promotional
activity and a higher mix of lower-margin products in Canada contributed to a decline in our gross profit rate. The SG&A rate
decline was primarily driven by Renew Blue cost reductions and tighter expense management in Canada and the elimination of
expenses associated with previously closed stores in Canada.
The components of the International segment's 5.0% revenue decrease in fiscal 2014 (12-month) were as follows:
Comparable sales impact (4.5)%
Impact of foreign currency exchange rate fluctuations (4.0)%
Net store changes (2.4)%
Non-comparable sales(1) (0.1)%
Extra month of revenue(2) 6.0 %
Total revenue decrease (5.0)%
(1) Non-comparable sales reflects the impact of revenue streams not included within our comparable sales calculation, such as certain credit card revenue,
gift card breakage and sales of merchandise to wholesalers and dealers.
(2) Represents the incremental revenue in fiscal 2014, which had 12 months of activity compared to 11 months in fiscal 2013 as a result of our fiscal year-end
change.
The closure of large-format stores in Canada at the end of fiscal 2013 (11-month) contributed to the majority of the decrease in
revenue associated with net store changes in our International segment in fiscal 2014 (12-month). The addition of large-format
stores in Mexico and small-format Best Buy Mobile stand-alone stores in Canada partially offset this decrease.
The following table presents the International segment's revenue mix percentages and comparable store sales percentage
changes by revenue category in fiscal 2014 (12-month) and 2013 (11-month):
Revenue Mix Summary Comparable Store Sales Summary
12 Months Ended 11 Months Ended 12 Months Ended 11 Months Ended
February 1, 2014 February 2, 2013 February 1, 2014 February 2, 2013
Consumer Electronics(1) 29% 32% (9.7)% (14.9)%
Computing and Mobile Phones(1) 50% 47% (1.7)% (2.7)%
Entertainment 10% 10% (9.3)% (17.4)%
Appliances 5% 5% (1.5)% (6.2)%
Services 6% 6% (6.3)% (10.7)%
Other <1% <1% n/a n/a
Total 100% 100% (5.1)% (9.1)%
(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 sales changes in our International segment by revenue category:
• Consumer Electronics: The 9.7% comparable sales decline was driven primarily by a decrease in sales of televisions,
digital imaging products and MP3 devices and accessories. The declines in digital imaging products and MP3 devices
and accessories were a result of device convergence, similar to trends seen in the Domestic segment.
• Computing and Mobile Phones: The 1.7% comparable sales decline was caused primarily by a decrease in sales of
computers and computer accessories, partially offset by increased tablet sales.