Best Buy Advances "Centricity

Currently, 85 US Best Buy stores have been convertedinto the new model, which allows store employees tobetter satisfy shoppers. Anderson says, "We believethis new operating model offers our customers a richerin-store experience, including better shoppingassistance as well as more of the products andservices they want."

Best Buy intends to open or convert 150 to 200 moreU.S. Best Buy stores to customer-centricity operatingmodel in fiscal 2006. By the end the fiscal year, theretailer will operate 250 to 300 customer centricitystores.

Converted stores will include elements designed toappeal to one or two of Best Buy's five key customersegments -- affluent professional males, youngentertainment enthusiasts who appreciate a digitallifestyle, upscale suburban moms, families who arepractical technology adopters and small businesseswith fewer than 20 employees.

According to Best Buy's Chairman & CEO Brad Anderson,stores that have already been converted posted betterfinancial results than other stores.Customer-centricity stores reported a comparable storesales gain of 8.4% during the fourth quarter fiscal2005 compared with 2.3% at other U.S. Best Buy stores.

During the fourth quarter, the retailer recordedearnings from operations of $522 million, or $1.55 perdiluted share, an increase of 11% compared with $469million, or $1.40 per diluted share, for the sameperiod last year. Similarly, fourth-quarter revenueincreased 9% to $9.2 billion, compared with revenue of$8.4 billion for the fourth quarter of fiscal 2004.The retailer attributes the increase to the additionof 78 new stores in the past 12 months. However,operating income, as a portion of revenue, declined to8.5% compared with 9% for the previous year.

Best Buy says it anticipates earnings in the range of$2.95 to $3.10 per diluted share from continuingoperation for fiscal 2006. The forecast represents again of roughly 11% for total earnings of more than$30 billion. Moreover, the retailer says it expects toopen 75 new stores and forecasts comparable storesales increases of 4% to 5%.