Best Buy 2007 Annual Report Download - page 5

Financial highlights
+Grew earnings per diluted share by 23 percent to $2.79
+Improved the operating income rate to 5.6 percent by reducing
the SG&A rate and gaining leverage on higher revenue
+Delivered a 5-percent comparable store sales gain and
bolstered revenue by 16 percent
+Returned 56 percent of net earnings, or $773 million,
to shareholders via share repurchases and dividends
Key wins
+Increased convenience by opening new stores
+Improved the store experience by expanding
home theater departments
+Offered customers incentives to experience true
high-definition TV with our “HD Done Right” campaign
+Encouraged customer loyalty by growing Reward Zone
memberships to 18 million
+Acquired two successful retailers with unique customers:
Pacific Sales and Five Star
+Opened our first Best Buy store in China
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Best Buy 2007 Annual Report |
We view ourselves as a network of assets, including
not only our strong balance sheet, but also our
140,000 employees and our relationships with vendors
and other companies within our network, stretching
from China to Silicon Valley.
We’ve found that when we encourage employees to
contribute their unique ideas, they get more excited
about growing the business and serving customers.
For example, we have hundreds of employees across
the company right now who volunteered to work on
ways to serve customers better, particularly female
customers. Our employees are tackling everything from
changing the tags on products, to recruiting female
employees, to identifying new business opportunities.
In fact, as early as this summer you’ll begin to see
changes on the product tags in our stores. Instead of
tags on a washer describing how many cubic feet
of laundry it holds, the tags might tell you how many
pairs of jeans will fit in one load. With the insight of
our employees, we can improve even the seemingly
simplest pieces of our business.
As CEO, I am never more proud than when our vibrant
culture challenges employees to take risks and offer
productive ideas that lead to personal fulfillment— and
great experiences for our customers.
Pursuing a strategy of growth
With confidence that our business strategy is working,
we are pursuing new growth avenues. We have made
mistakes, but perhaps the one we regret most at this
time is not pushing harder on our growth initiatives last
year. Based on the returns we have enjoyed in areas
such as services, international expansion and customer
access, we plan to push harder in the coming year.
Again, we view our company as a collection of assets,
including employees, vendors, partners and a strong
balance sheet. Our intention is to deploy our assets in
ways that improve our return on capital. We will find
new customers and new talent globally, and add new
skills where we see unmet customer needs. We’re
committed to helping people take full advantage of the
promise of technology to help them live, learn, work
and play. Our plan envisions further growth from invest-
ments in our core business and international growth.
We expect to continue to pursue acquisitions that bring
new capabilities to allow us to serve customers better.
In addition, we plan to repurchase our common stock—
a solid avenue to deliver shareholder return. Our hard
work has put us in a position to undertake all these
growth initiatives— and we can increase that activity
across the board in the upcoming year.
For the fiscal year, our return on invested capital was
21 percent. We continue to improve our core business
while we pursue new growth opportunities. Equally
important in my mind are wise investments in people. If
we do both well, we expect to achieve both short-term
performance goals and long-term growth. We also
expect to achieve our core ambition, which is to inspire
people around the world to connect in new ways.