Best Buy 1999 Annual Report Download - page 6

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TO OUR SHAREHOLDERS, EMPLOYEES, CUSTOMERS
AND VENDORS:
This has been the most successful year in the Company’s 33-year
history. We have achieved many company milestones this year
through the efforts of our dedicated employees, as well as the
continued support of our supplier community.
I am extremely pleased to report that in fiscal 1999 Best Buy
attained record revenues of more than $10 billion, earnings of
$224 million – a 138% increase – and our market capitalization
exceeded $10 billion. During the past calendar year, our per-
share stock price improved by 233%, ranking second in “highest
total return to investors,” according to Fortune magazine. In
May 1998 and March 1999, we were able to provide our share-
holders a two-for-one stock split, both in the form of a 100%
dividend.
We clearly surpassed our goals for fiscal 1999 as we concentrated
on sustaining the momentum from our fiscal 1998 strategic
initiatives – capitalizing upon our Process to Profits program,
enhancing our retail operations and refining our inventory
management skills. It has been a truly exciting year for everyone
at Best Buy.
FISCAL 1999 INITIATIVES
Our organization’s continued focus on turning strategic initiatives
into positive results, combined with strong consumer spending
throughout the year, produced a 13.5% increase in comparable
store sales and an improvement in operating income to 3.6%
of sales. Overall revenue increased 21% to a record $10.1 billion.
Earnings were $224.4 million for the year, with earnings per share
of $1.07 on a diluted basis. This compares to $94.5 million, or
52 cents per share, last year.
Our cash position increased significantly to over $780 million at
year end, reflecting improvements in both operating profits and
our inventory management systems. Inventories remained level
with last year despite 28 new stores and a double-digit comparable
store sales increase. For the second consecutive year we have
increased our inventory turns by one full turn to 6.6 times,
while also providing our customers an improved in-stock level.
Richard M. Schulze
Founder, Chairman & CEO