Best Buy's December Revenue Rises 10% to $5.1 Billion; Comparable Store Sales Increase 2.5% as Sales of MP3 Players, Digital TVs and Digital Cameras Surge

Business Wire, Jan 6, 2005

LAS VEGAS -- Company reiterates EPS range for fiscal year of $2.80-$2.90

December Revenue Summary - Fiscal 2005
                      (U.S. dollars in billions)
----------------------------------------------------------------------
                                                    Comparable Store
                        Revenue      Revenue Gain     Sales Gain(1)
----------------------------------------------------------------------
Total Company              $5.1              10%               2.5%
----------------------------------------------------------------------
  Domestic                 $4.5               9%               2.6%
----------------------------------------------------------------------
  International            $0.6              23%(2)            1.4%
----------------------------------------------------------------------

   (1) Comprised of revenue at stores and Web 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. The
calculation of the comparable store sales gain excludes the effect of
fluctuations in foreign currency exchange rates.

   (2) The effect of fluctuations in foreign currency exchange rates
accounted for approximately two-fifths of the international segment's
revenue gain for the fiscal month.

Best Buy Co., Inc. (NYSE:BBY), from the Consumer Electronics Show, today reported that revenue for the fiscal month ended Jan. 1, 2005, rose 10 percent to $5.1 billion, compared with $4.6 billion for the fiscal month ended Jan. 3, 2004. The revenue increase was principally driven by the addition of 79 new stores in the past 12 months. Best Buy also reported a comparable store sales gain of 2.5 percent for the five-week period, as solid execution in the stores resulted in increased sales of MP3 players, digital TVs, digital cameras, DVD movies and notebook computers.

"Our stores' productivity has never been higher," said Brad Anderson, vice chairman and chief executive officer, referring to revenue per square foot. "While we noted a modest decline in customer traffic compared with that of December of last year, our average ticket increased, driven by continued consumer interest in digital products and the performance of our customer centricity stores. Our comparable store sales gain came on top of a 9.3-percent gain for the same period last year. Overall, we believe we gained market share, thanks to outstanding teamwork between our retail and corporate employees."

U.S. and Canadian Stores Enjoy Comparable Store Sales Gains, Customer Centricity Stores' Gains Collectively Continue to Lead Chain

The company's 661 U.S. Best Buy stores reported revenue of $4.5 billion for fiscal December, an increase of 9 percent over the prior year. Best Buy's U.S. stores reported a comparable store sales gain of 2.6 percent for the fiscal month, reflecting solid in-store execution and the benefit of two extra shopping days prior to Christmas. Best Buy's 67 segmented stores, which opened in October as part of the company's customer centricity initiative, collectively maintained their relative sales outperformance compared with the other U.S. Best Buy stores, which was expected.

"We were very pleased with our segmented stores' performance and continue to explore ways to apply what we are learning to other stores," Anderson said. "Best Buy's customer centricity initiative empowers employees to recognize unique sets of customers and to build offerings and experiences that meet their specific needs. These stores' continued performance gives us increased confidence that this approach is the right direction for Best Buy."

Magnolia Audio Video, a high-end retailer of consumer electronics with 22 stores, reported revenue of $20 million, which was a decrease of 6 percent, driven by a comparable store sales decline of 6.0 percent. The company's domestic segment, including both U.S. Best Buy stores and Magnolia Audio Video stores, had revenue of $4.5 billion, an increase of 9 percent, including a comparable store sales gain of 2.6 percent.

The company's 144 Canadian stores, including both Future Shop and Best Buy locations, contributed revenue of $610 million for the fiscal month, an increase of 23 percent compared with the prior year. Approximately two-fifths of the increase was due to favorable exchange rates, while the addition of new stores also had a significant impact. The international segment had a comparable store sales gain of 1.4 percent for the period, reflecting solid holiday results, which were partially offset by the Sunday timing of the Boxing Day holiday.

Online traffic at the company's web sites - including BestBuy.com, BestBuy.ca, FutureShop.ca, GeekSquad.com and MagnoliaAV.com - also rose significantly for fiscal December.

The company opened two U.S. Best Buy stores and two Canadian Best Buy stores during the fiscal month, adding a total of 122,000 square feet.