Best Buy 2014 Annual Report Download - page 42

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37
The following table presents the International segment's revenue mix percentages and comparable store sales percentage
changes by revenue category in fiscal 2014 (12-month) and 2013 (11-month):
Revenue Mix Summary Comparable Store Sales Summary
12 Months Ended 11 Months Ended 12 Months Ended 11 Months Ended
February 1, 2014 February 2, 2013 February 1, 2014 February 2, 2013
Consumer Electronics(1) 28% 31% (9.4)% (16.4)%
Computing and Mobile Phones(1) 40% 39% (1.7)% (4.3)%
Entertainment 7% 8% (9.3)% (17.4)%
Appliances 20% 17% 8.4 % (15.1)%
Services 5% 5% (5.3)% (10.0)%
Other <1% <1% n/a n/a
Total 100% 100% (3.1)% (11.4)%
(1) In fiscal 2014, e-Readers were moved from the "Consumer Electronics" revenue category to "Computing and Mobile Phones" to reflect the continued
convergence of their features with tablets and other computing devices.
The following is a description of the notable comparable store sales changes in our International segment by revenue category:
• Consumer Electronics: The 9.4% comparable store sales decline was driven primarily by a decrease in sales of
televisions, digital imaging products, and MP3 devices and accessories. The declines in digital imaging products and
MP3 devices and accessories were a result of device convergence, similar to trends seen in the Domestic segment.
• Computing and Mobile Phones: The 1.7% comparable store sales decline was caused primarily by a decrease in
sales of computers and computer accessories, partially offset by increased tablet sales.
• Entertainment: The 9.3% comparable store sales decline, principally in Canada, reflected a decrease in sales of
movies due to a lack of new releases and weak gaming sales in the first three quarters, as consumers awaited the
launch of new platforms in the fourth quarter of fiscal 2014 (12-month).
• Appliances: The 8.4% comparable store sales gain was primarily due to effective promotional offers and an increase
in sales of air conditioners in China helped by periods of unseasonably warm weather.
• Services: The 5.3% comparable store sales decline was primarily due to a decrease in sales of extended warranties in
Canada driven by the overall comparable store sales decline and a change in product mix, particularly in televisions.
Our International segment experienced a gross profit decline of $93 million, or 6.2%, in fiscal 2014 (12-month), driven
primarily by revenue declines in Canada and China and a decrease in the gross profit rate, which were partially offset by an
extra month of activity. The 1.3% of revenue decrease in the gross profit rate was driven by increased promotional activity and
an increased mix of lower-margin products, primarily in Canada.
Our International segment's SG&A decreased $68 million, or 4.7%, in fiscal 2014 (12-month) due to savings from previous
store closures in Canada and China and Renew Blue cost reduction initiatives, partially offset by an extra month of activity. The
SG&A rate also decreased by 0.9% of revenue as a result of the aforementioned factors.
Our International segment recorded $36 million and $87 million of restructuring charges in fiscal 2014 (12-month) and 2013
(11-month), respectively. The fiscal 2014 (12-month) restructuring charges primarily related to employee termination benefits
as a result of Renew Blue cost reduction initiatives. The restructuring charges in fiscal 2013 (11-month) also related to our
Renew Blue initiatives and consisted of facility closure costs, property and equipment impairments, and employee termination
benefits. These restructuring charges resulted in a decrease in our operating income in fiscal 2014 (12-month) and fiscal 2013
(11-month) of 0.5% of revenue and 1.3% of revenue, respectively. Refer to Note 6, Restructuring Charges, of the Notes to
Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report
on Form 10-K for further information about our restructuring activities.
During fiscal 2014 (12-month), we recorded no goodwill impairment charges compared to $819 million in fiscal 2013 (11-
month). Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements,
included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information
about the fiscal 2013 (11-month) goodwill impairment.
The decrease in the International segment's operating loss in fiscal 2014 (12-month) was primarily due to the decreased
goodwill impairment and restructuring charges, partially offset by a decrease in gross profit.