Best Buy's First-Quarter Net Earnings Rise to $170 Million, or $0.51 per Diluted Share; Company Raises Guidance for Fiscal 2006 Diluted EPS to a New Range of $3.10 to $3.25.
First-Quarter Performance Summary
(U.S. dollars in millions, except per share amounts)
Quarter Ended
May 29, 2004 May 29, 2004
May 28, 2005 (As Reported)(1) (As Adjusted)(2)
----------------------------------------------------------------------
Revenue $6,118 $5,479 $5,479
----------------------------------------------------------------------
Comparable store
sales % gain(3) 4.4% 8.3% 8.3%
----------------------------------------------------------------------
Gross profit as %
of revenue 25.5% 23.9% 23.9%
----------------------------------------------------------------------
SG&A as % of
revenue 21.6% 20.6% 21.2%
----------------------------------------------------------------------
Operating income as
% of revenue 3.9% 3.4% 2.7%
----------------------------------------------------------------------
Diluted EPS $0.51 $0.34 $0.28
----------------------------------------------------------------------
(1) Certain amounts have been reclassified to conform to the current
presentation. These reclassifications had no effect on operating
income or net earnings.
(2) As-adjusted results reflect the impact of expensing stock-based
compensation, as if the company had applied Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, in fiscal 2005. The as adjusted financial data is
considered a non-GAAP financial measure and is not preferable to GAAP
financial data. However, the company believes this information
provides comparability of our fiscal 2006 financial results, which
include stock-based compensation expense, with the results for the
prior year.
(3) Comprised of revenue at stores 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. The
calculation of the comparable store sales gain excludes the effect of
fluctuations in foreign currency exchange rates.
NOTE: Supplemental business segment information for fiscal 2005,
including the impact of accounting changes made at the end of fiscal
2005, is available on the company's Web site at www.BestBuy.com under
"For Our Investors."
Best Buy Co., Inc. (NYSE NYSE See: New York Stock Exchange :BBY BBY Best Buy (stock symbol) BBY Before Battle of Yavin (Star Wars) BBY BeBeyond (Chinese online community) ) today reported net earnings of $170 million, or $0.51 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the first quarter, which ended on May 28, 2005. First-quarter net earnings increased 85 percent year-over-year as compared to $92 million, or $0.28 per diluted share, had Best Buy expensed stock-based compensation previously. The company's earnings for the first quarter of fiscal 2006 significantly exceeded the mean analysts' estimate of $0.30 per diluted share. "We are extremely pleased with the first-quarter results, which exceeded our expectations on several dimensions, including revenue growth, the gross profit rate and results at stores converted to our customer-centric operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. ," said Brad Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic , vice chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Best Buy. "The common denominator common denominator n. 1. Mathematics A quantity into which all the denominators of a set of fractions may be divided without a remainder. 2. A commonly shared theme or trait. was outstanding execution by our employees, who continue to drive the transformation of our business model." North America's leading consumer electronics retailer reported that revenue increased 12 percent to $6.1 billion, driven by the opening of new stores and a comparable store sales gain of 4.4 percent. U.S. Best Buy stores reported revenue of $5.5 billion and a first-quarter comparable store sales gain of 4.5 percent, reflecting a higher average ticket. The company's international stores, comprised of Future Shop and Best Buy stores in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , generated revenue of $626 million and a comparable store sales gain of 3.0 percent for the quarter. Magnolia Audio Video Magnolia Audio Video is a specialty consumer electronics retailer in the United States. It currently operates 13 standalone stores throughout Washington, Oregon, and California. stores reported revenue of $30 million, including a comparable store sales gain for the quarter of 1.4 percent. The company saw the largest increase in customer spending on MP3 players A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. , digital TVs, video games See video game console. , digital cameras and notebook computers A laptop computer that weighs in a range from five to seven pounds. The term originated when laptops were routinely more than 10 pounds, and those that became lighter were placed in a special "notebook" category. In practice, notebook computer and laptop computer are synonymous. . These strong-selling product categories more than offset the impact of declining product categories, such as desktop computers, analog televisions Analog television (or analogue television) encodes television and transports the picture and sound information as an analog signal, that is, by varying the amplitude and/or frequencies of the broadcast signal. and cellular phones. "By empowering our employees to focus on our customers' needs and lifestyles, we continue to generate solid, profitable revenue growth with existing and new customers," Anderson said. As shown below, Best Buy's revenue mix for the first quarter of fiscal 2006 reflected an increase from the consumer electronics product group:
Summary of Product Revenue Mix
First Quarter Ended
Product Group May 28, 2005 May 29, 2004
----------------------------------------------------------------------
Consumer Electronics 40% 38%
----------------------------------------------------------------------
Home Office 34% 36%
----------------------------------------------------------------------
Entertainment Software 20% 20%
----------------------------------------------------------------------
Appliances 6% 6%
----------------------------------------------------------------------
Total 100% 100%
----------------------------------------------------------------------
Note: All periods presented reflect the reclassification of MP3
players into the consumer electronics product group from the home
office product group.
The consumer electronics product group, which represented 40 percent of revenue for the quarter, posted a high-single-digit comparable store sales gain for the quarter and led the company's results again. Within this group, digital televisions enjoyed strong double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. comparable store sales growth as customers continued to experience the benefits of this platform, resulting in unit increases that more than offset lower average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. . U.S. Best Buy stores reset their digital TV departments last fall in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of the trend, offering an expanded assortment assortment /as·sort·ment/ (ah-sort´ment) the random distribution of nonhomologous chromosomes to daughter cells in metaphase of the first meiotic division. as·sort·ment n. and new, more effective displays. In addition, the company completed its migration to an employee model for its U.S. home theater An audio/video entertainment center that has a large-screen TV and hi-fi system with three speakers in the front (left, right and center) and left and right speakers in the rear. Starting in the early 1990s, video inputs were added to stereo receivers and preamplifiers. installation business during the quarter (rather than using third parties), in order to improve its control of the customer experience. Total television comparable store sales grew by the high-single digits as digital television gains were partially offset by declines from analog TVs. The consumer electronics product group continued to be supported by triple-digit gains in comparable store sales from MP3 players, which benefited from better in-stock levels, and double-digit growth in digital imaging, reflecting expanded assortments as well as new displays installed last fall. The results from these strong growth areas were partially offset by declines in comparable store sales for satellite TV systems and certain audio products. Appliances represented 6 percent of revenue and reported a comparable store sales gain in the mid-single digits. The growth from the appliances product group was led by mid-single-digit comparable store sales growth in major appliances A major appliance is usually defined as a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, food preservation, or cleaning, whether in a household, institutional, commercial or industrial setting. , reflecting an expansion of the company's improved appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. assortments and labor model to more stores. Home office products, representing 34 percent of the quarter's revenue, reported a modest comparable store sale gain for the first quarter. Low-double-digit comparable store sales increases for notebook computers reflected expanded assortments and more effective serpentine serpentine (sûr`pəntēn, –tīn), hydrous silicate of magnesium. It occurs in crystalline form only as a pseudomorph having the form of some other mineral and is generally found in the form of chrysotile (silky fibers) and displays; these results were partially offset by comparable store sales declines in monitors and desktop computers as well as cellular phones. During the quarter, Best Buy's store locations collectively added more than 1,500 Geek Squad The Geek Squad is a subsidiary of the Best Buy Company and is based in Richfield, Minnesota [1]. Originally founded in 1994 by Robert Stephens, it offers various computer-related services and accessories for residential and commercial clients. agents as more consumers look for computer support at home or inside Best Buy stores. The entertainment software product group, which comprised 20 percent of revenue for the first quarter, rose slightly on a comparable store sales basis. Solid double-digit growth in video gaming video gaming n. 1. Gambling by means of interactive games of chance played on a video screen. 2. The playing of video games. products, driven by the launch of Playstation A video game console from Sony that was introduced in the U.S. in 1995. CD-ROM based and using a 32-bit MIPS CPU, the original PlayStation was the first of a family of desktop and handheld units. Portable, was offset by comparable store sales declines in revenue from DVDs and CDs. During the quarter, the company began offering tailored market assortments in entertainment software as well as select other product categories. During the first quarter of fiscal 2006, the company opened 11 U.S. Best Buy stores, including two 45,000-square-foot stores, seven 30,000-square-foot stores and two stores in its 20,000-square-foot format. The company also opened two Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Best Buy stores and one Future Shop store in its international segment. At the end of the first quarter, the company operated 679 U.S. Best Buy stores, 20 Magnolia Audio Video stores, 32 Canadian Best Buy stores and 115 Future Shop stores. In the past 12 months, the company opened 80 new stores and closed three stores. An Improved Gross Profit Rate Drives Earnings Increase The gross profit rate for the first quarter was 25.5 percent of revenue, up from a gross profit rate of 23.9 percent of revenue for the first quarter of the prior year. The gross profit rate improvement for the quarter was better than expected because of a more modest promotional environment, improved product model transitions and supply chain benefits related to pricing, global sourcing and private label initiatives. Compared with the prior year, the company's gross profit rate also benefited from an increase of higher-margin services in the revenue mix and the conversion of more segmented stores to the customer-centric operating model. The company's selling, general and administrative expenses rate was 21.6 percent of revenue for the first quarter compared with 21.2 percent for the prior year's first quarter. The increase in the SG&A rate was driven by planned investments in accelerating customer centricity Customer centricity refers to the orientation of a company to the needs and behaviours of its customers, rather than internal drivers (such as the quest for short term profit). , a higher mix of services and an increase in costs associated with store relocations. However, the expense rate benefited from leverage associated with better-than-expected revenue growth and the timing of certain items. The company reported net interest income of $13 million for the first quarter of fiscal 2006, a $13 million improvement versus the same period last year, driven by higher interest rates, increased short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments and the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan in June June: see month. 2004 of a portion of the company's convertible debt. The company's effective income tax rate declined to 32.5 percent for the first quarter of fiscal 2006, compared with 38.1 percent for the same period one year ago. The decline was due primarily to higher levels of tax-exempt interest Tax-Exempt Interest Interest income that is exempt from federal income tax. Although it is not directly taxed, this income may still be required to determine other tax calculations such as social security benefits. , increased income tax benefits associated with foreign operations and the resolution of certain federal and state income tax matters. The company reported that it now expects its annual effective income tax rate for fiscal 2006 to be 34.5 percent to 35.0 percent, compared with previous guidance of 36.5 percent to 37.0 percent. The anticipated decline in the annual effective income tax rate was primarily related to higher levels of tax-exempt interest and increased income tax benefits associated with foreign operations. Segmented Stores' Performance Continues to Lead Chain U.S. Best Buy stores converted to the customer-centric operating model last October October: see month. continued to deliver twice the comparable store sales gain and a higher gross profit rate when compared with other U.S. Best Buy stores. In addition, these segmented stores made progress with their operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. structure. "Consumers are responding well to the change in how our employees engage with them and suggest solutions that fit their individual lifestyle," Anderson said. "Moreover, we continue to improve in our execution of the new business model. This work is driving changes in everything from our supply chain to our service offerings to our marketing programs. While making such sweeping changes is difficult, we believe it helps differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. Best Buy in the marketplace." On June 3, 2005, Best Buy announced customized "store-within-a-store A store within a store is an agreement in which the owner of a shop lets a part of the shop site to be used by different company to run another shop. This agreement is popular among filling stations and supermarkets. " experiences for small business owners and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. home theater enthusiasts at 45 stores. The company said it remains on track to open or convert a total of 150 to 200 segmented stores during fiscal 2006. In addition, it continues to provide all other stores with elements of the new business model. "The customer-centric cycle now is how we do business, and that work is so much broader than simply the segmented stores," said Anderson. "All of our employees are empowered to find new ways to create a differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: , end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. shopping experience for customers." Company Raises EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Guidance for Fiscal 2006 The company raised its earnings guidance for fiscal 2006 to a new range of $3.10 to $3.25 per diluted share, up from the prior guidance of $2.95 to $3.10 per diluted share for fiscal 2006. The company reported that it continues to expect revenue for the fiscal year of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $30 billion, including a comparable store sales gain of 4 percent to 5 percent. Darren Jackson Darren Jackson (born 25 July 1966 in Edinburgh) is a former Scottish professional footballer. Career Jackson played for Meadowbank Thistle, Newcastle United, Dundee United, Hibernian, Celtic, Coventry City, Hearts, Livingston, St. Johnstone and Clydebank. , executive vice president - finance and chief financial officer, said, "Our business outlook for the balance of the fiscal year remains upbeat. This new range is a function of the outstanding results of the first quarter and a reduced effective income tax rate for the fiscal year. Additionally, our intent with the new earnings range is to maintain flexibility for potentially larger investments in our transformation, including segmenting more stores, opening more new stores and enhancing our services business. The revised earnings guidance reflects a certain degree of conservatism, but we are mindful mind·ful adj. Attentive; heedful: always mindful of family responsibilities. See Synonyms at careful. mind that we have the majority of the year's earnings in front of us." The company also provided its initial earnings guidance for the fiscal second quarter. The company set an earnings range of $0.51 to $0.56 per diluted share. This range assumed a comparable store sales gain of approximately 4 percent; a modest improvement in the operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rate compared to last year, driven by a higher gross profit rate, partially offset by higher expenses (associated with the expansion of the services business, the timing of certain expenses and additional segmented stores); and, finally, a lower effective income tax rate. "We remain very enthusiastic about the opportunity to derive de·rive v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. earnings growth from services expansion, new stores, supply chain efficiencies, IT cost reductions and other enhancements as we transform our business model," Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. said. Best Buy Repurchases $207 Million in Stock During the first quarter, Best Buy repurchased 4,033,368 shares of its common stock at an average price of $51.35 per share for a total of $207 million. At the end of the first quarter of fiscal 2006, the company had $1.4 billion remaining under the $1.5 billion authorization The right or permission to use a system resource; the process of granting access. See access control. for share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . The company previously reported that it repurchased 3,837,291 shares of its common stock at an average price of $52.09 per share in fiscal 2005. The company on May 11, 2005, paid a first-quarter dividend of 11 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , a 10-percent increase compared with the dividend paid in the prior year's first quarter. Best Buy is scheduled to conduct an earnings conference call at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on June 14, 2005. The call is expected to be available on its Web site both live and after the call, at www.BestBuy.com. The public may access the call by clicking on "For Our Investors." Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements: This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect management's current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning. These statements involve a number of risks and uncertainties and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions, acquisitions and development of new businesses, product availability, sales volumes, profit margins, weather, foreign currency fluctuation Fluctuation A price or interest rate change. , availability of suitable real estate locations, our ability to react to a disaster recovery situation, and the impact of labor markets labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience and new product introductions on our overall profitability. A further list and description of these risks, uncertainties and other matters can be found in the company's Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the Securities and Exchange Commission on March 18, 2004, and in our other periodic reports filed from time to time with the SEC. Best Buy cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statements that it may make. About Best Buy Co., Inc. Best Buy Co., Inc. (NYSE:BBY) is an innovative Fortune 100 growth company that continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. strives to create superior customer experiences. Through more than 840 retail stores across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in Canada, our employees connect customers with technology and entertainment products and services that make life easier and more fun. We sell consumer electronics, home-office products, entertainment software, appliances and related services. A Minneapolis-based company, our operations include: Best Buy (BestBuy.com and BestBuyCanada.ca), Future Shop (FutureShop.ca), Geek Squad (GeekSquad.com) and Magnolia Audio Video (Magnoliaav.com). We support our communities through employee volunteerism vol·un·teer·ism n. Use of or reliance on volunteers, especially to perform social or educational work in communities. volunteerism and grants from The Best Buy Children's Foundation.
Domestic First-Quarter Performance Summary(1)
(U.S. dollars in millions)
Quarter Ended
May 29, 2004 May 29, 2004
May 28, 2005 (As Reported)(2) (As Adjusted)(3)
----------------------------------------------------------------------
Revenue $5,492 $4,980 $4,980
----------------------------------------------------------------------
Comparable store
sales % gain(4) 4.5% 8.4% 8.4%
----------------------------------------------------------------------
Gross profit as %
of revenue 25.7% 24.1% 24.1%
----------------------------------------------------------------------
SG&A as % of
revenue 21.3% 20.2% 20.9%
----------------------------------------------------------------------
Operating income $242 $190 $156
----------------------------------------------------------------------
Operating income as
% of revenue 4.4% 3.8% 3.1%
----------------------------------------------------------------------
(1) The domestic segment is comprised of U.S. Best Buy and Magnolia
Audio Video operations.
(2) Certain amounts have been reclassified to conform to the current
presentation. These reclassifications had no effect on operating
income, net earnings, financial position or cash flows.
(3) As-adjusted results reflect the impact of expensing stock-based
compensation, as if the company had applied SFAS No. 123 in fiscal
2005.
(4) Comprised of revenue at stores 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.
NOTE: Supplemental business segment information for fiscal 2005,
including the impact of accounting changes made at the end of fiscal
2005, now is available on the company's Web site at www.BestBuy.com
under "For Our Investors."
International First-Quarter Performance Summary(1)
(U.S. dollars in millions)
Quarter Ended
May 29, 2004 May 29, 2004
May 28, 2005 (As Reported)(2) (As Adjusted)(3)
----------------------------------------------------------------------
Revenue $626 $499 $499
----------------------------------------------------------------------
Comparable store
sales % gain(4) 3.0% 7.2% 7.2%
----------------------------------------------------------------------
Gross profit as %
of revenue 23.5% 22.5% 22.5%
----------------------------------------------------------------------
SG&A as % of
revenue 24.0% 23.8% 24.0%
----------------------------------------------------------------------
Operating loss ($3) ($6) ($7)
----------------------------------------------------------------------
Operating loss as %
of revenue (0.5%) (1.3%) (1.4%)
----------------------------------------------------------------------
(1) The international segment is comprised of Future Shop and Best Buy
operations in Canada.
(2) Certain amounts have been reclassified to conform to the current
presentation. These reclassifications had no effect on operating
income, net earnings, financial position or cash flows.
(3) As-adjusted results reflect the impact of expensing stock-based
compensation, as if the company had applied SFAS No. 123 in fiscal
2005.
(4) Comprised of revenue at stores and Web sites operating for at
least 14 full months, as well as remodeled and expanded locations.
Relocated stores are excluded from the comparable store sales
calculation until at least 14 full months after reopening. The
calculation of the comparable store sales percentage gain excludes the
effect of fluctuations in foreign currency exchange rates.
BEST BUY CO., INC.
CONSOLIDATED STATEMENTS OF EARNINGS
($ in millions, except per share amounts)
(Unaudited)
Three Months Ended
--------------------------------------------------
May 29, 2004 May 29, 2004
May 28, 2005 (As Reported) (As Adjusted)(1)
---------------- ---------------- ----------------
Revenue $6,118 $5,479 $5,479
Cost of goods sold 4,560 4,168 4,168
---------------- ---------------- ----------------
Gross profit 1,558 1,311 1,311
Gross profit % 25.5% 23.9% 23.9%
Selling, general
and administrative
expenses 1,319 1,127 1,162
SG&A % 21.6% 20.6% 21.2%
---------------- ---------------- ----------------
Operating income 239 184 149
Net interest income 13 -- --
---------------- ---------------- ----------------
Earnings before
income tax expense 252 184 149
Income tax expense 82 70 57
Effective tax
rate 32.5% 38.1% 38.1%
---------------- ---------------- ----------------
Net earnings $170 $114 $92
================ ================ ================
Basic earnings per
share $0.52 $0.35 $0.28
================ ================ ================
Diluted earnings
per share $0.51 $0.34 $0.28
================ ================ ================
Dividends declared
per common share $0.11 $0.10 $0.10
Basic weighted
average common
shares outstanding
(in millions) 327.5 324.7 324.7
Diluted weighted
average common
shares outstanding
(in millions) 336.8 335.7 331.7
(1) As-adjusted results reflect the impact of expensing stock-based
compensation, as if the company had applied Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, in fiscal 2005.
BEST BUY CO., INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in millions)
(Unaudited)
Subject to Reclassification
May 28, May 29,
2005 2004
------------- -------------
ASSETS
Current assets
Cash & cash equivalents $604 $250
Short-term investments 2,002 1,820
Receivables 350 371
Merchandise inventories 3,266 2,915
Other current assets 383 246
------------- -------------
Total current assets 6,605 5,602
Net property & equipment 2,456 2,239
Goodwill 507 467
Tradename 40 37
Long-term investments 113 --
Other assets 178 205
------------- -------------
TOTAL ASSETS $9,899 $8,550
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $3,047 $2,611
Accrued liabilities 1,504 1,358
Current portion of long-term debt 14 369
------------- -------------
Total current liabilities 4,565 4,338
Long-term liabilities 373 251
Long-term debt 530 477
Shareholders' equity 4,431 3,484
------------- -------------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $ 9,899 $ 8,550
============= =============
|
|
Printer friendly
Cite/link
Email
Feedback
Reader Opinion