Best Buy First-Quarter Comparable Store Sales Increase 8.3 Percent.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--June 3, 2004 Revenue increases 17% to $5.47 billion; Company expects Q1 earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the at the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of its range of 30 to 35 cents per diluted share
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First-Quarter Revenue Summary - Fiscal 2005
(U.S. dollars in billions)
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Comparable Store
Revenue Revenue Gain Sales Gain(1)
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Continuing Operations $5.47 17% 8.3%
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Domestic $4.98 16% 8.4%
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International $0.49 27%(2) 7.2%
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Note: All periods presented reflect the classification of Musicland's
financial results as discontinued operations.
(1) Comprised of revenue at stores and Internet 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.
Acquired stores are included in the comparable store sales
calculation beginning with the first full quarter following the
first anniversary of the date of acquisition. The calculation of
the comparable store sales gain excludes the effect of changes in
foreign currency exchange rates.
(2) The effect of changes in foreign currency exchange rates accounted
for approximately three-tenths of the international segment's
revenue gain for the first quarter.
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 that revenue rose 17 percent to $5.47 billion for the fiscal quarter ended May 29, 2004, compared with $4.67 billion for the first quarter of the prior fiscal year. The revenue increase was driven by the addition of 84 stores in the past 12 months and a comparable store sales gain of 8.3 percent. The comparable store sales gain was led by strong gains in sales of digital televisions, DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. movies, digital cameras, 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. and 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. . "Store employees continued their excellent execution in the first quarter, which we believe led to market share gains," said Brad Anderson, 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. "In addition, our 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). test stores provided insights we can apply to all of our stores. I also was delighted to see ideas that could enrich a smaller group of stores, such as our new Magnolia Magnolia, city, United States Magnolia (măgnō`lyə), city (1990 pop. 11,151), seat of Columbia co., SW Ark.; inc. 1855. Its oil industry has been important since 1938. 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. departments. They were introduced inside two U.S. Best Buy stores last month, and they have started out exceedingly well." Company Continues to Expect Sharp Increase in First-Quarter Earnings "Our comparable store sales gain was very strong for March and April, then slowed somewhat in May as we faced tougher comparisons with the prior year's period," said 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 and CFO See Chief Financial Officer. of Best Buy. "Yet we finished the quarter on a high note, thanks to a very strong Memorial Day weekend." "Previously, we had expected a first-quarter comparable store sales gain of 7 to 9 percent, so the actual gain was in the middle of our range," Jackson added. "We currently anticipate earnings from continuing operations for the first quarter also to be at the midpoint of our guidance, which was 30 to 35 cents per diluted share." He noted that such a performance would represent an earnings increase of approximately 55 percent, compared with earnings from continuing operations of 21 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. for the prior year's first quarter. Jackson continued, "Traffic in our stores and online sites increased significantly on a year-over-year basis. Given how our business has performed, we believe that neither the hike in gasoline prices nor forecasts for higher interest rates significantly affected our comparable store sales performance for the first quarter. However, we may be benefiting from the encouraging employment news and its impact on consumer confidence." Best Buy is expected to provide its initial earnings guidance for the fiscal second quarter on June 16, 2004. Strong New Titles Drive Comparable Store Sales Gain in Entertainment Software As shown below, all product categories contributed the same percentage of total revenue in the first quarter of fiscal 2005 as in the first quarter of fiscal 2004.
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First Quarter Ended
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Product Category May 29, 2004 May 31, 2003
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Consumer Electronics 37% 37%
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Home Office 37% 37%
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Entertainment Software 20% 20%
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Appliances 6% 6%
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Total 100% 100%
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The strongest-performing product category was entertainment software, which achieved a comparable store sales gain in the low double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . Comparable store sales of DVDs rose by strong double digits, driven by popular new releases including Lord of the Rings -- The Return of the King, which surpassed the company's previous record for first-week sales of a new release. Other strong new releases in the first quarter were School of Rock, Matrix Revolutions and Master and Commander. Comparable store sales of CDs jumped by the mid-teens, amid continuing sales of titles by Usher, Connie West, Prince and Nora Jones, as well as popular new titles by Method Man, New-Found Glory and Slipknot (web) SlipKnot - A graphical World-Wide Web browser specifically designed for Microsoft Windows users who have Unix shell accounts with their service providers. Its primary feature is that it does not require SLIP or PPP or TCP/IP services. . Video game hardware and software posted a decline in comparable store sales in the low double digits, due in part to a hardware price reduction. The appliance category reported a high-single-digit comparable store sales gain. Store employees generated strong results with front-load laundry products due to differentiated brand offerings and consumer interest in new technology. The company also saw a positive start to seasonal sales of air-conditioning and refrigeration refrigeration, process for drawing heat from substances to lower their temperature, often for purposes of preservation. Refrigeration in its modern, portable form also depends on insulating materials that are thin yet effective. equipment. The launch of next-day delivery, available seven days a week at U.S. Best Buy stores, also contributed to higher revenue in the category. The consumer electronics category recorded a high-single-digit comparable store sales gain, as the appeal of advanced televisions (such as plasma, LCD and digital televisions) continued to increase. The strong growth in revenue from digital cameras and accessories reflected the growing popularity of digital imaging. These products led the video subcategory sub·cat·e·go·ry n. pl. sub·cat·e·go·ries A subdivision that has common differentiating characteristics within a larger category. to a low-double-digit comparable store sales gain, which was moderated by a low-single-digit comparable store sales gain in the audio subcategory. The home office category also posted a comparable store sales gain in the high single digits, with comparable store sales of computers rising in line with the total category. Consumers continued to be attracted by the portability of notebook computers, while also recognizing the important role of the desktop computer as a media server. Comparable store sales of MP3 devices showed triple-digit growth. The company opened 11 U.S. Best Buy stores during its fiscal first quarter, including three of its 45,000-square-foot stores, five of its 30,000-square-foot stores and three of its 20,000-square-foot stores. It also opened one Future Shop store in Canada. The company currently operates 619 U.S. Best Buy stores and 22 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 in the domestic segment, and 109 Future Shop stores and 19 Canadian Best Buy stores in the international segment. (For square footage and store concept information, please refer to www.BestBuy.com and click on "For Our Investors.") Best Buy is scheduled to release its fiscal first-quarter earnings before the stock market opens on Wednesday, June 16. Its earnings conference call is scheduled to begin 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 16 and will be available on its Web site both live and after the call, at www.BestBuy.com. Investors may access the call by clicking on "For Our Investors." Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Such 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. are based on management's beliefs and assumptions regarding information currently available, 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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among others, those expressed in the company's filings with the Securities and Exchange Commission. The company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release. About Best Buy Co., Inc. Minneapolis-based Best Buy Co., Inc. (NYSE:BBY) is North America's leading specialty retailer of consumer electronics, home-office products, entertainment software and appliances. The company's subsidiaries operate retail stores and/or Web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), 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. (GeekSquad.com), and Magnolia Audio Video (Magnoliaav.com). The company's subsidiaries reach consumers through more than 750 stores in 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 Canada. |
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