Best Buy Co., Inc. provides consumer electronics, home office products, entertainment products, appliances and related services. It operates through two business segments: Domestic and International. The Domestic segment is comprised of the operations in all states, districts and territories of the U.S., operating under various brand names, including but not limited to, Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, Napster and Pacific Sales. The International segment is comprised of all operations outside the U.S. and its territories, which includes Canada, Europe, China, Mexico and Turkey. It also markets its products under the brand names: Best Buy, Audio visions, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales and The Phone House. The company was founded by Richard M. Schulze in 1966 and is headquartered in Richfield, MN.
We face strong competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers, vendors and mobile network carriers, which directly affects our revenue and profitability.
Our strategy to expand into new products, services and technologies brings new business, financial and regulatory risks.
Our focus on services as a strategic priority exposes us to certain risks that could have a material adverse impact on our revenue and profitability as well as our reputation.
Our reliance on key vendors and mobile network carriers subjects us to various risks and uncertainties which could affect our revenue and profitability.
If we fail to attract, retain and engage appropriately qualified employees, including employees in key positions, our operations and profitability may be harmed. Changes in market compensation rates may adversely affect our profitability.
We are subject to certain statutory, regulatory and legal developments which could have a material adverse impact on our business.
Macroeconomic pressures in the markets in which we operate could adversely affect consumer spending and our financial results.
Failure to effectively manage our costs could have a material adverse effect on our profitability.
We rely heavily on our information technology systems for our key business processes. Any failure or interruption in these systems could have a material adverse impact on our business.
Failure to prevent or effectively respond to a breach of the privacy or security of our customer, employee, vendor or company information could expose us to substantial costs and reputational damage, as well as litigation and enforcement actions.
Failure to effectively manage strategic ventures, alliances or acquisitions could have a negative impact on our business.
We are highly dependent on the cash flows and net earnings we generate during our fourth fiscal quarter, which includes the majority of the holiday shopping season.
Many of the products we sell are highly susceptible to technological advancement, product life cycle fluctuations and changes in consumer preferences.
Economic, regulatory and other developments could adversely affect our ability to offer attractive promotional financing to our customers and adversely affect the profits we generate from these programs.
Interruptions and other factors affecting our supply chain, including in-bound deliveries from our vendors, may adversely affect our business.
Catastrophic events could adversely affect our operating results.
Demand for the products and services we sell could decline if we fail to maintain positive brand perception and recognition.
Product safety and quality concerns could have a material adverse impact on our revenue and profitability.
Changes to labor or employment laws or regulations could have an adverse impact on our costs and impair the viability of our operating model.
Failure to effectively manage our real estate portfolio may negatively impact our operating results.
Constraints in the capital markets or our vendor credit terms may have a material adverse impact on our liquidity.
Changes in our credit ratings may limit our access to capital and materially increase our borrowing costs.
We utilize third-party vendors for certain aspects of our operations, and any material disruption in our relationship or their services might have an impact to our business.
Our exclusive brands products are subject to several additional product, supply chain and legal risks that could affect our operating results.
We are subject to risks associated with vendors that source products outside of the U.S.
Our international activities are subject to many of the same risks as described above, as well as to risks associated with the legislative, judicial, regulatory, political, economic and cultural factors specific to the countries or regions in which we operate.
Failure to meet the financial performance guidance or other forward-looking statements we have provided to the public could result in a decline in our stock price.
Consolidated revenue of $42.9 billion in fiscal 2019 increased 1.7% compared to fiscal 2018. Fiscal 2018 includes approximately $760 million of revenue from the extra week. The components of the 1.7% revenue increase in fiscal 2019 were as follows: