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Management
Discussion & Analysis pg 1
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| We
also increased our charitable giving in fiscal 2002. Our increased
expenses were partially offset by reduced advertising expenditures
as a percentage of revenues, improved productivity and comparison
with prior fiscal year expenses, which included the launch of
BestBuy.com, our entry into the New York market and the write-off
of certain e-commerce investments. In addition, our focus on
controlling expenses, such as corporate hiring and outside
consulting costs, positively impacted our SG&A rate. Overall,
the results of operations at Magnolia Hi-Fi did not significantly
impact the Best Buy segment’s financial results.
During fiscal 2002, we opened 62 new Best Buy stores, including 20 stores in our 30,000-square-foot format. The openings brought our total to 481 stores, compared with 419 stores at the end of fiscal 2001. In addition, we remodeled three Best Buy stores and expanded two Best Buy stores during fiscal 2002, compared with no remodeled stores and two expanded stores in fiscal 2001. Magnolia Hi-Fi continued to operate 13 stores, unchanged from fiscal 2001. Musicland
(1) Pro forma
results of operations at Musicland, including the amortization of
goodwill, as though it had been acquired at the beginning of
fiscal 2001. For fiscal
2002, Musicland revenues were $1.9 billion, slightly lower than
last year’s pro forma results. Comparable store sales decreased
0.9% for the fiscal year primarily due to reduced mall traffic and
softness in sales of prerecorded music and VHS movies. The
comparable store sales decline was partially offset by increased
sales of DVD movies and the introduction of new gaming hardware
and software. |
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