Best Buy 2004 Annual Report Download - page 7

My role as a leader will be to keep
our employees inspired and focused
on our vision lest success were to erode
our resolve to change.
Clearly we are winning in consumer
electronics retailing today. We enjoyed
a strong performance from nearly
every corner of the company last year.
Comparable store sales rose 7.1 percent.
Revenue rose 17 percent to $24.5 billion.
Earnings from continuing operations
jumped 29 percent to $800 million, or
$2.44 per diluted share. We increased
cash provided by operations by more than
$660 million. Our strong cash position
enabled us to initiate a quarterly, 10-cent
dividend and to resume repurchases of
our common shares—a combination few
retailers can deliver. We believe that our
market share attained a new high, including
multiple product groups that are key to
our success. Customer loyalty, customer
satisfaction, brand awareness and employee
attitude measures all are at all-time highs
for us. We have positive momentum.
The Opportunity to Win
Because we’re the leader in our category
today and because we believe in the
importance of innovation, we continue
to invest in long-term, strategic initiatives.
Great product-centric companies excel
in product R&D. We need to research,
develop and test innovative ways to create
truly differentiated customer experiences.
We began by spending approximately
0.3 percent of our revenue last year
developing and testing our customer
centricity initiative (and we also generated
additional revenue and gross profit dollars
from the test stores). While the experimen-
tation will continue, in the coming year we
plan to convert up to 110 additional U.S.
Best Buy stores to the customer centricity
platform. With a critical mass of these
stores, we expect to glean the insights
needed to accelerate the rollout the
following year. Our goal is to convert the
majority of our stores to the customer
centricity platform within the next few years.
This transformation is no small bet. But we
believe that it is the right direction for
Best Buy. As we succeed, we will widen
the gap between us and all of our
competitors. Meanwhile, we will learn
more about our customers, and that is
always a worthwhile investment.
We have incredible employees running
our stores and operating our business.
I would like to thank them for the results
they achieved in fiscal 2004. They are
the reason I am excited about the
possibilities ahead of us and optimistic
about the future.
With the support of our employees, vendors
and, of course, my fellow shareholders, we
expect to have a prosperous year in fiscal
2005 and an even brighter future in the
years beyond.
Bradbury H. Anderson
Vice Chairman and CEO
Best Buy Co., Inc. 5
02 03 04
Sales Proficiency
We scored 7.1 in sales
proficiency, or the
salesperson’s ability to
match the customer with
a product/technology
(on a 1 to 10 scale).
6.4
7.0 7.1
02 03 04
Customer Loyalty
Forty-five percent of
customers rated us 5
on a 1-to-5 scale in all
three categories: overall
satisfaction, likelihood to
return and likelihood
to recommend to others.
34%
42%
45%