Amazon on Thursday reported its financial results for the first quarter of 2012. Analysts were looking for a profit of $0.07 per share on $12.86 billion in sales, and Amazon posted earnings of $0.28 per share on revenue of $13.18 billion, crushing expectations. The retailer netted $0.38 per share on revenue of $17.4 billion this past holiday quarter, and $0.44 per share on $9.86 billion in sales during the first quarter last year. The nationwide retailer’s stock had been up and down all week as Wall Street’s concerns over margins continued to rattle investors. Amazon’s operating margin fell 3.7% to 1.5% of global revenue in the fourth quarter and in the first quarter a year ago, Amazon’s margins sat at 3.3%. In the first quarter of 2012, Amazon’s operating margins stayed flat at 1.5%. For the second quarter, Amazon forecasts a profit of $40 million, up from a loss of $260 million in the second quarter last year, on revenue of between $11.9 billion and $13.3 billion. Amazon’s stock was up more than 12% percent during after-hours trading on Thursday. The company’s full press release follows below.

Following Best Buy’s announcement that it would shutter 50 retail locations as part of an effort to cut costs, one market research firm said it believes the decline of big-box consumer electronics retailers in the United States and Europe will continue. Canalys said in a report on Tuesday that it expects more big-name retailers to follow in the footsteps of companies like Best Buy Europe, CompUSA and Circuit City, which filed for bankruptcy in 2008 before closing all of its retail stores and selling its online brand. Big-box retailers’ failure to adapt as aggressive online companies such as Amazon grew rapidly is seen as the root cause of their woes. “They were hit by a perfect storm of competition from the Internet and supermarkets,” Canalys CEO Steve Brazier said in a statement. ”They lost too much business to competitors undercutting them on price and failed to respond to the many attractions of Amazon’s online approach, such as its vast stock ranges, peer reviews, recommendations, free delivery and excellent returns services.” Brazier continued, “Today’s consumers are even willing to browse for a book in a local store then order it from Amazon at a higher price simply because they want Amazon to understand their entire library, to optimize future recommendations. This is more than ‘showrooming’ – this signals a fundamental shift in consumer perception of value.” Canalys’s full press release follows below.

Expect more famous retailers to disappear

- Services and experiences are key to retailers’ survival

Shanghai, Palo Alto, Singapore and Reading – 17 April 2012

Market analyst firm Canalys predicts that many more consumer electronics (CE) retailers will follow in the footsteps of Surcouf, Best Buy Europe, CompUSA and Circuit City and disappear from the high streets of Europe and the United States. It describes this as a result of the ‘strategic failure’ of the CE retailing model and warns retail chains in other segments to learn quickly from the mistakes of the fallen.

‘They were hit by a perfect storm of competition from the Internet and supermarkets. They lost too much business to competitors undercutting them on price and failed to respond to the many attractions of Amazon’s online approach, such as its vast stock ranges, peer reviews, recommendations, free delivery and excellent returns services,’ said Canalys CEO, Steve Brazier. ‘Today’s consumers are even willing to browse for a book in a local store then order it from Amazon at a higher price simply because they want Amazon to understand their entire library, to optimize future recommendations. This is more than “showrooming” – this signals a fundamental shift in consumer perception of value.’

As well as online competition, supermarkets have proved adept at running promotions for low-end products, and are often willing to sacrifice margins to bring customers to their stores.

‘They have the locations and the parking facilities, which make them convenient for collection of heavier items,’ added Alastair Edwards, Canalys Principal Analyst. ‘Many have good online tools and make deliveries too. In many countries, supermarkets are the most efficient route for shipping a single product in high volumes.’

Edwards pointed out that CE retailers in Europe saw their lucrative extended warranty business undermined too, by the EU’s insistence that two-year warranties be provided as standard. Their content businesses have also collapsed: most have seen their vinyl, film, film processing, CD and now DVD businesses disappear. Kindle and iPad apps are removing opportunities in books and magazines. Software applications and gaming are transferring to online and download businesses too.

‘The future for multi-specialists, such as the much respected FNAC in France, looks as bleak as for the more hardware-focused companies,’ Edwards continued. ‘CE retailers now offer very few benefits to consumers. They appeal to the rapidly shrinking proportion of people who are unable or unwilling to shop online. They enable impulse buying and they allow somebody to pick up a product immediately, rather than the next day. But that’s about all.’

The growth of Internet shopping should not have come as a surprise to the retailers; the threat has been building for 15 years or more. Yet, as a group, they failed spectacularly to respond. Most now have online stores to complement their shops, but in nearly every mature market they are the distant followers, not the leaders, of Internet retail.

‘The window of opportunity has closed; they will never catch up with the Internet specialists. They started late, under-invested and could not build a culture to excite talented programmers. Their Internet businesses were held back by them not wanting to undercut in-store prices,’ Edwards said. ‘They wrongly assumed the benefits of “touch and feel” would continue to protect them, but a new generation of consumers has grown up with a different way of thinking. The success of online fashion retailing is a strong indicator that no category is safe from this change in behavior; other retailers should take note.’

What path, then, should the remaining CE retailers take? Some will look towards Asia, but Canalys points out that, although Internet shopping is still a niche activity in some countries, for example Thailand and Singapore, it is booming in China. It is not wise, therefore, to assume safety in emerging markets.

Canalys suggests that some may explore becoming genuine showrooms – that demonstrate but do not sell – but this will require funding from vendors. Some will no doubt look at Apple and argue that its iconic stores have redefined modern retailing. They provide a luxury setting in prestigious locations and offer a range of services from free hints and tips, to paid-for classroom training. They partner with artists and create events to attract the crowds. They offer one-to-one sales engagement to maximize accessory and upsell opportunities. They also integrate closely with the online shop by offering mixed services such as ‘reserve online, collect tomorrow’.

Few can doubt the wisdom of Apple’s approach while it sits on its perch as the most successful company in the world, but the attraction of the stores to Apple may be more about the company’s ability to control the brand and customer experience than anything to do with retailing economics. Chris Jones, Canalys VP and Principal Analyst, raised a key question:

‘Do the stores attract the customers, or do customers come simply because Apple’s products are so popular? Competitors should be extremely cautious before trying to emulate Apple’s approach. The product ranges of most other companies are unlikely to generate customer traffic at anything like a similar rate.’

Canalys predicts that, by 2020, many city centers will look quite different from today, with many famous retailers disappearing.

‘People will seek retail premises out for a number of reasons: for experiences centered around entertainment, relaxation and education; for events, such as celebrity appearances, performances and signings; for socialization and sustenance; and where brand exclusivity or the nature of specialization or service required cannot be met by online alternatives,’ said Edwards. ‘A great innovator may find a way to build a next-generation outlet that can shift CE goods while offering some of these experiences, but it is more likely that the majority of CE retail chains in mature markets will simply disappear within the next five years.’

Best Buy on Thursday reported results for the fourth fiscal quarter of 2012. The nationwide retail giant had missed Wall Street’s estimates in both the second and third fiscal quarters, and it posted mixed results in the fourth quarter. Revenue came in at $16.6 billion compared to analysts’ consensus of $17.15 billion, and non-GAAP earnings of $2.47 per share, up 25% from the same quarter in fiscal 2011, beating the Street’s $2.15 EPS consensus. ”In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Best Buy CEO Brian J. Dunn. ”As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability.” After jumping more than 3% in pre-market trading, shares of Best Buy stock were down 7% shortly after the market opened on Thursday. The company’s full press release follows below.

Best Buy Reports Fiscal Fourth Quarter and Full Year 2012 Results

Outlines New Transformation Strategy Describes Specific Actions to Improve Business Performance – Fourth Quarter and Full Year EPS: GAAP: loss of ($4.89) in the fourth quarter; ($3.36) for the full year, inclusive of previously announced charges Adjusted (non-GAAP): profit of $2.47 in the fourth quarter, up 25 percent; $3.64 for the full year, up 6 percent – Transformation Strategy to Focus on: Multi-year cost reduction program U.S. store format improvements Growth initiatives  Improved customer experience – Actions to Improve Business Performance: $800 million in planned cost reductions by fiscal 2015; $250 million in fiscal 2013 Reductions to fund investments in enhanced customer experience and growth initiatives Launch Connected Store full market test in the Twin Cities and San Antonio in fiscal 2013 Closure of 50 U.S. big box stores in fiscal 2013 Opening of 100 U.S. Best Buy Mobile small format stand-alone stores in fiscal 2013 Plans to grow Domestic segment online revenue 15 percent in fiscal 2013 – Fiscal 2013 EPS Outlook GAAP:  $2.85 to $3.25 Adjusted (non-GAAP): $3.50 to $3.80, up 3 to 12 percent vs fiscal 2012 EPS of $3.39 (as recast for new fiscal year) MINNEAPOLIS, March 29, 2012 — Best Buy Co., Inc. (NYSE: BBY) today reported a GAAP net loss of ($1.7) billion, or ($4.89) per share, for its fourth quarter ended March 3, 2012 compared to net income of $651 million, or $1.62 per diluted share for the prior-year period. The fiscal fourth quarter 2012 results include $2.6 billion of charges primarily related to the actions announced on November 7, 2011, which consist of the purchase of Carphone Warehouse Group plc’s (CPW) share of the Best Buy Mobile profit share agreement and related costs, a non-cash impairment charge to reflect the write-off of Best Buy Europe goodwill, and restructuring charges (primarily associated with U.K. big box pilot store closures). Excluding the above charges, adjusted (non-GAAP) diluted earnings per share for the fourth quarter were $2.47, an increase of 25 percent when compared to adjusted diluted earnings per share of $1.98 for the prior-year period. Comparable store sales for the quarter declined 2.4 percent compared to a decline of 4.7 percent for the prior-year period. For the fiscal year ended March 3, 2012, GAAP loss per share totaled ($3.36) compared to diluted earnings per share of $3.08 in fiscal 2011. Adjusted (non-GAAP) diluted earnings per share for the fiscal year totaled $3.64, an increase of 6 percent when compared to the previous year’s adjusted diluted earnings per share of $3.43. Comparable store sales for the fiscal year declined 1.7 percent compared to a decline of 1.8 percent for the prior-year period. Please see “Reconciliation of Non-GAAP Financial Measures” attached to this release and on the investor relations website, www.investors.bestbuy.com, for more detail. ACTIONS TO TRANSFORM BUSINESS OPERATIONS “In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Brian J. Dunn, CEO of Best Buy. “As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability. “These changes will also help lower our overall cost structure. We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line. At the same time, we will continue to accelerate our key initiatives — growing connections and services, expanding our digital capabilities and growing our business in China. “As a result, we believe these actions will position us to grow earnings, improve ROIC, and increase value to our shareholders in the years ahead.” $800 Million Multi-year Cost Reduction Program In order to be more efficient and align the company with the opportunities that will provide the greatest returns, the company is taking significant actions to lower its cost base: Planning $800 million in cost reductions by fiscal 2015; including approximately $250 million in fiscal 2013. The planned Domestic segment reductions include: Retail stores: $300 million Corporate and support structure: $300 million Cost of goods sold: $200 million. Specific actions intended to lower costs are expected to include: The closure of 50 U.S. Best Buy big box stores in fiscal 2013. Cost savings in corporate and support structure from IT services savings, procurement savings on non merchandise purchases, a reduction in outside consultant services and reduction of approximately 400 positions in our corporate and support areas. Savings in cost of goods sold driven by reduction of product transition costs, lower product return and exchange expenses and supply chain efficiencies. U.S. Store Format Improvements Best Buy’s retail store strategy is to increase points of presence, while decreasing overall square footage, for increased flexibility in a multi-channel environment. The company intends to remodel key stores with a new Connected Store format in fiscal 2013, and to continue to build out the successful Best Buy Mobile small format stores throughout the U.S. Based on results from store pilots conducted in 2010 and 2011, Best Buy will be deploying “at-scale” market tests of its new Connected Store format in the Twin Cities and San Antonio metro areas. The store remodels are expected to be completed before the 2012 holiday season. Connected Stores are remodeled big box stores that focus on connections(1), services and multi-channel experience through a total transformation of both the store and the operating environment. The company expects total big box square footage in these combined test markets to be reduced by almost 20 percent through store downsizing and closures, while points of presence will increase by more than 20 percent. Best Buy expects to open another 100 U.S. Best Buy Mobile small format stores in fiscal 2013 and continues to expect to have a total of 600 to 800 such stores by fiscal 2016 (from 305 today). Growth Initiatives Best Buy plans to invest to maximize the long-term opportunities offered through its existing four key growth initiatives: e-commerce, connections, services and China. Domestic segment online sales are expected to grow 15 percent in fiscal 2013 and the company continues to expect to reach $4 billion by fiscal 2016. As announced earlier this month, Stephen Gillett has been named to the newly created role of executive vice president and president, Best Buy Digital and Global Business Services to lead the company’s global digital strategy. Connections in the U.S. are targeted to grow 15 percent in fiscal 2013, driven by continued mobile phone growth and increased connections in other product categories including tablets and computing. Revenue from Domestic segment services category is expected to grow 10 percent in fiscal 2013. In China, the company plans to open 50 new Five Star stores in fiscal 2013, including 14 new mobile store-within-a-store concepts, and continues to target $4 billion in sales and a total of 400 to 500 (from 204 today) Five Star stores by fiscal 2016. Improved Customer Experience Best Buy plans to expand the benefits under its Reward Zone Silver loyalty program, whose members account for a significant percentage of the company’s profit. Reward Zone Silver customers will receive exciting enhancements including free expedited shipping, premier access to many of the most popular products and major sales events, a free house call from the Geek Squad, and 60-day no hassle returns and price-match policy. As part of the company’s actions to significantly improve the customer experience, Best Buy will be making important changes later this year to its store operating model that are designed to drive a differentiated employee experience. The company plans to introduce a new store labor model to be implemented in all of its U.S. big box stores before the 2012 holiday season that will provide increased store employee training and a new enhanced compensation plan that introduces financial incentives for delivering on customer service and business goals. The new compensation plan, which will be implemented across the company later this year, is based on a model that has been used successfully in the company’s Best Buy Mobile stores. FOURTH QUARTER AND FULL YEAR FISCAL 2012 FINANCIAL RESULTS As announced November 7, 2011, net operating results from the closed Best Buy stores in the U.K., China and Turkey, along with other recently sold businesses, are now treated as discontinued operations. All information regarding the company’s operating results, unless otherwise noted, pertains to its continuing operations. FISCAL FOURTH QUARTER PERFORMANCE SUMMARY (U.S. dollars in millions, except per share amounts) Three Months Ended Mar. 3, 2012 Feb. 26, 2011 Change GAAP Revenue $16,630 $16,083 3% Comparable store sales % change(2) (2.4%) (4.7%) – Gross profit $4,057 $3,929 3% SG&A $2,765 $2,654 4% Restructuring charges $16 $138 (88%) Goodwill impairment charge $1,207 – – Operating income $69 $1,137 (94%) Diluted EPS from continuing operations ($4.73) $1.84 n/a Diluted EPS, including discontinued operations ($4.89) $1.62 n/a Adjusted (non-GAAP) Results(3) Gross profit as % of revenue 24.5% 24.5% 0bps SG&A as % of revenue 16.3% 16.5% (20bps) Operating income $1,357 $1,284 6% Operating income as % of revenue 8.2% 8.0% 20bps Diluted EPS from continuing operations $2.50 $2.07 21% To facilitate comparison to prior results and expectations, the following table presents key line items that reflect adjusted (non-GAAP) results from both continuing and discontinued operations. Please see “Reconciliation of Non-GAAP Financial Measures” attached to this release for more detail. Three Months Ended Mar. 3, 2012 Feb. 26, 2011 Change Adjusted (non-GAAP) Results, including both continuing and discontinued operations(4) Revenue $16,730 $16,256 3% Gross profit as % of revenue 24.5% 24.4% 10bps SG&A as % of revenue 16.5% 16.9% (40bps) Operating income $1,326 $1,227 8% Operating income as % of revenue 7.9% 7.5% 40bps Diluted EPS $2.47 $1.98 25% Fiscal Fourth Quarter 2012 Highlights Domestic segment online revenue growth of 21 percent Domestic segment mobile phones comparable store sales growth of 20 percent Domestic segment connections growth of 13 percent Domestic segment tablets and eReaders comparable store sales each increased low triple-digits Domestic segment comparable store sales declines in gaming, notebooks, digital imaging and televisions International gross profit rate improvement of 120 basis points Share repurchases of $317 million (12.8 million shares) Fiscal Full Year 2012 Highlights Comparable store sales decline of (1.7) percent Estimated gain in total market share in the Domestic segment Domestic segment online revenue growth of 18 percent Domestic segment mobile phones comparable store sales growth of 13 percent Domestic segment connections growth of 11 percent International adjusted operating income dollars increased 17 percent Free cash flow of $2.5 billion(5) Share repurchases of $1.5 billion (54.6 million shares) Closed U.K. big box pilot stores to refocus Best Buy Europe on 2,400 small format stores Purchased CPW’s interest in Best Buy Mobile profit share agreement in the U.S. and Canada to more fully capitalize on the significant and growing connections opportunity Revenue Three Months ended March 3, 2012 Prior-Year Period ($millions) Revenue Change YOY Comp. Store Sales Comp. Store Sales Domestic $12,600 4.2% (2.2%) (5.5%) International 4,030 1.1% (2.9%) (1.7%) Total $16,630 3.4% (2.4%) (4.7%) Total company revenue was $16.6 billion during the fiscal fourth quarter, an increase of 3.4 percent compared to the prior-year period and included a comparable store sales decline of 2.4 percent. Excluding the 53rd week in the fourth quarter of fiscal 2012, total company revenue declined 1.1 percent compared to the prior-year period. The Domestic segment areas of comparable store sales growth included tablets and mobile phones within the Computing & Mobile Phones revenue category and eReaders within the Consumer Electronics revenue category. These increases were more than offset by comparable store sales declines in other areas, including gaming within the Entertainment revenue category, notebooks within the Computing and Mobile Phones category and digital imaging and televisions within the Consumer Electronics revenue category. The Domestic segment online channel delivered a 21 percent revenue increase compared to the prior-year period. The International segment comparable store sales decline was primarily driven by industry softness in gaming, home theater and digital imaging in Canada and lower connections in Europe given the difficult macro environment, partially offset by gains in Five Star stores in China. Gross Profit Three Months ended March 3, 2012 ($millions) Gross Profit Change YOY % of Revenue Domestic $3,015 2% 23.9% International 1,042 6% 25.9% Total $4,057 3% 24.4% Adjusted gross profit – Domestic $3,034 3% 24.1% Adjusted gross profit – International 1,042 6% 25.9% Adjusted gross profit(3) $4,076 4% 24.5% Excluding restructuring charges, Domestic segment adjusted gross profit dollars increased 3 percent including the 53rd week and represented a rate decline of 40 basis points. The primary factor influencing this Domestic segment rate decline was a larger mix of lower-margin promotional small and mid-size televisions. International segment gross profit dollar growth of 6 percent was the result of a rate increase of 120 basis points driven by improvements from stores throughout the International segment. Selling, General and Administrative expenses (“SG&A”) Three Months ended March 3, 2012 ($millions) SG&A Change YOY % of Revenue Domestic $1,932 1% 15.3% International 833 13% 20.7% Total $2,765 4% 16.6% Adjusted SG&A – Domestic $1,932 1% 15.3% Adjusted SG&A – International 787 7% 19.5% Adjusted SG&A(3) $2,719 2% 16.3% In the Domestic segment, focused cost control activities resulted in only 1 percent growth in SG&A spending compared to the prior-year period. The International segment’s SG&A includes $46 million in costs related to the purchase of CPW’s share of the Best Buy Mobile profit share agreement. Excluding those expenses, International segment adjusted SG&A spending increased 7 percent, driven primarily by the absence of a Best Buy Mobile profit share payment, which historically was an increase in Domestic segment SG&A and a reduction in International segment SG&A, and new store openings in Canada. Total company adjusted SG&A dollar spending increased 2 percent and as a percent of revenue improved 20 basis points. Excluding the effect of the 53rd week, total company adjusted SG&A spending was approximately flat. Operating Income Three Months ended March 3, 2012 ($millions) Operating Income Change YOY % of Revenue Domestic $1,077 8% 8.5% International (1,008) n/a n/a Total $69 (94%) 0.4% Adjusted operating income – Domestic $1,102 6% 8.7% Adjusted operating income – International 255 2% 6.3% Adjusted operating income(3) $1,357 6% 8.2% Excluding restructuring charges, costs related to the purchase of CPW’s share of the Best Buy Mobile profit share agreement and the goodwill impairment, adjusted operating income for the quarter increased 6 percent to $1.4 billion, or 8.2 percent of revenue, compared to $1.3 billion, or 8.0 percent of revenue, for the prior-year period. Please see the table titled “Reconciliation of Non-GAAP Financial Measures” attached to this release for more detail. Free Cash Flow, Share Repurchases and Dividends Fiscal 2012 free cash flow was $2.5 billion, primarily driven by effective management of inventory levels and the timing of several working capital items at the end of the previous fiscal year. During the fourth quarter, the company repurchased $317 million, or 12.8 million shares, of its common stock at an average price of $24.76 per share. For the full year, the company repurchased $1.5 billion, or 54.6 million shares, of its common stock at an average price of $27.47 per share. On January 24, 2012, the company paid a quarterly dividend of $0.16 per common share outstanding, or $56 million in the aggregate. Fiscal Year Change  As announced on November 7, 2011, Best Buy will change its fiscal year to end the Saturday nearest the end of January, effective starting in the first quarter of fiscal 2013. Below is detail on the quarterly periods for fiscal 2013, which includes 53 weeks: 1st Fiscal Quarter: Feb. / March / April January 29, 2012 to May 5, 2012 2nd Fiscal Quarter: May / June / July May 6, 2012 to August 4, 2012 3rd Fiscal Quarter: Aug. / Sept. / Oct. August 5, 2012 to November 3, 2012 4th Fiscal Quarter: Nov. / Dec. / Jan. November 4, 2012 to February 2, 2013 Under the new fiscal year, fiscal 2013 will include 53 weeks, while the recast fiscal 2012 includes 52 weeks. The company’s annual report for fiscal 2013 on Form 10-K will cover the 11-month period of March 4, 2012, to February 2, 2013. For important information on the fiscal year change, including fiscal 2011 and 2012 financial statements recast for the new fiscal year, please visit the company’s investor relations website,www.investors.bestbuy.com. Fiscal 2013 Annual Guidance  The following guidance is based on the company’s new fiscal year. Fiscal 2013 comprises the 53-week period ending on February 2, 2013, and fiscal 2012 now comprises the 52-week period ending on January 28, 2012. Revenue expected in the range of $50.0 billion to $51.0 billion, reflecting a comparable store sales decline in the range of 2 to 4 percent. These expected results are compared with fiscal 2012 revenue of $50.0 billion and comparable store sales decline of 2.1 percent (recast for the new fiscal year). Adjusted (non-GAAP) operating income dollars expected to decrease 4 to 11 percent when compared to adjusted operating income for fiscal 2012 from continuing operations (recast for the new fiscal year) of $2.3 billion. Adjusted operating income dollars expected to be in the range of a 4 percent decline to 4 percent growth when compared to adjusted operating income for fiscal 2012 from total operations (including both continuing and discontinued operations recast for the new fiscal year) of $2.1 billion. Adjusted (non-GAAP) diluted EPS expected in the range of $3.50 to $3.80, including the expected repurchase of approximately $750 million to $1.0 billion of common shares and excluding fiscal 2013 restructuring costs related to the transformation strategy outlined above. This reflects growth of 3 to 12 percent over the fiscal 2012 adjusted EPS based on the new fiscal year of $3.39. The company’s preliminary estimates for pre-tax restructuring charges in fiscal 2013 related to its transformation strategy outlined above is a range of $300 to $350 million, including store closures, severance, asset impairments and other costs. Including these charges, the preliminary GAAP diluted EPS is expected in the range of $2.85 to $3.25. Please see “Reconciliation of Non-GAAP Guidance” attached to this release for more detail. For more information on the fiscal year change, including fiscal 2011 and fiscal 2012 financial statements recast for the new fiscal year, please visit the company’s investor relations website, www.investors.bestbuy.com.

Apple market capitalization, as it sits, is just over $514 billion — an astonishing number we’re all still getting used to. Even more amazing, however, is that Apple’s market cap is about to be larger than the entire United States retail sector. With Friday’s iPad launch, we’re guessing that $14 billion in market value won’t be an issue…

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Microsoft may be planning to launch a special bundle that includes the Nokia Lumia 800 and several accessories for $899. Citing unnamed industry sources, The Verge said the deal will kick off on February 14th and will include a Bluetooth headset, a Purity HD stereo headset and Nokia’s Play 360 wireless speaker. Microsoft will reportedly not be offering the Lumia 800 as a stand-alone product. $899 seems a bit steep to us, even considering that consumers will be getting an unlocked device and a bundle of solid accessories. After all, AT&T will be launching the sub-$100 Lumia 900 with 4G LTE support and a bigger screen just one month later.

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Amazon announced the company’s fourth quarter results last week, which fell short of Wall Street’s estimates. The company reported $17.4 billion in revenue, with net sales up 35% from $12.95 billion in the same quarter of 2010. Despite falling short of analyst estimates of $18.26 billion, Amazon’s growth was more than twice the overall market’s growth according to data from comScore. At $49.6 million, U.S. retail spending was only up 14% in the fourth quarter of 2011. “The growth rate represented the ninth consecutive quarter of positive year-over-year growth and fifth consecutive quarter of double-digit growth rates,” said the company’s press release. “For the entire 2011 year, U.S. retail e-commerce spending reached a record $161.5 billion, marking a 13-percent increase from 2010.” Read on for comScore’s full press release.

comScore Reports $50 Billion in Q4 2011 U.S. Retail E-Commerce Spending, Up 14 Percent vs. Year Ago

Spending Reaches $161.5 Billion for Full Year 2011 Marking 13 Percent Gain
comScore Chairman Gian Fulgoni to Present Update on Q4 2011 E-Commerce Trends in Upcoming Webinar

RESTON, VA, February 6, 2012 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released its Q4 2011 U.S. retail e-commerce sales estimates, which showed that online retail spending reached $49.7 billion for the quarter, up 14 percent versus year ago. This growth rate represented the ninth consecutive quarter of positive year-over-year growth and fifth consecutive quarter of double-digit growth rates. For the entire 2011 year, U.S. retail e-commerce spending reached a record $161.5 billion, marking a 13-percent increase from 2010.

Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.S. – Home & Work Locations Source: comScore, Inc.
Quarter	E-Commerce Spending ($ Millions)	Y/Y Percent Change
Q1 2007	$27,970	17%
Q2 2007	$27,176	23%
Q3 2007	$28,441	23%
Q4 2007	$39,132	19%
Q1 2008	$31,178	11%
Q2 2008	$30,581	13%
Q3 2008	$30,274	6%
Q4 2008	$38,071	-3%
Q1 2009	$31,031	0%
Q2 2009	$30,169	-1%
Q3 2009	$29,552	-2%
Q4 2009	$39,045	3%
Q1 2010	$33,984	10%
Q2 2010	$32,942	9%
Q3 2010	$32,133	9%
Q4 2010	$43,432	11%
Q1 2011	$38,002	12%
Q2 2011	$37,501	14%
Q3 2011	$36,308	13%
Q4 2011	$49,698	14%

“The fourth quarter of 2011 capped off what was yet another strong year for online retail, one in which every quarter achieved double-digit increases versus the prior year,” said comScore chairman Gian Fulgoni. “In the face of continuing uncertainty regarding the U.S. economy, consumers increasingly went online for their shopping needs. Price and convenience continue to be the critical value drivers for e-commerce, and unless those conditions change we can expect to see more channel-shifting to online in 2012 and perhaps even an acceleration in the current growth trend.” Other highlights from Q4 2011 include:

• The top-performing online product categories were: Digital Content & Subscriptions, Jewelry & Watches, Consumer Electronics, Toys & Hobbies, and Computer Software. Each category grew at least 18 percent vs. year ago.
• Ten individual days in Q4 surpassed $1 billion in online spending, led by Cyber Monday (Nov. 28) at $1.251 billion. Monday, Dec. 5 ranked second at $1.178 billion, followed by Green Monday (Dec. 12) at $1.133 billion.
• 52 percent of e-commerce transactions included free shipping, representing an all-time high. The previous high was Q4 2010 at 49 percent.
• Smartphones and tablets played a growing role in online shopping, with consumers increasingly using smartphones to check prices and product features while physically in a retail store.

Amazon is preparing to open a retail store in Seattle within the next few months, according to a report from Good eReader. Amazon is apparently looking to open a small boutique rather than a large shop in an effort to test the market. The store would feature the Amazon Exclusive book line and the company’s popular eReaders and tablets most prominently according to the rumor. Amazon’s headquarters is located in Seattle, which is known as being fairly tech savvy and may be the perfect location to gauge interest in such an endeavor. The company has reportedly already contracted the design through a shell company and it is expected that the first location will open ahead of the holiday season this year.

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Apple has hired Dixons Retail chief executive officer John Browett to run its retail business as senior VP of retail. Browett will assume his new position in April and will be responsible for Apple’s retail strategy and on expanding Apple’s presence around the globe. “Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Tim Cook, Apple’s CEO. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.” Browett has been the CEO of Dixons Retail since 2007 and has also served as the CEO of Tesco. He earned a degree in natural sciences from Cambridge University and an MBA from University of Pennsylvania’s Wharton Business School. Apple’s full press release follows after the break.

John Browett Joins Apple as Senior Vice President of Retail

CUPERTINO, California—January 30, 2012—Apple® today announced that John Browett will join the company as senior vice president of Retail, reporting to Apple CEO Tim Cook. Browett comes to Apple from European technology retailer Dixons Retail, where he has been CEO since 2007. Beginning in April, he will be responsible for Apple’s retail strategy and the continued expansion of Apple retail stores around the world.

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Tim Cook, Apple’s CEO. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.”

Prior to joining Dixons Retail, Browett held a series of executive positions at Tesco plc including CEO of Tesco.com. Earlier in his career he advised retail and consumer goods clients at Boston Consulting Group. He holds a degree in Natural Sciences from Cambridge University and an MBA from Wharton Business School.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Italy’s Antitrust Authority has fined Apple Sales International, Apple Italia Srl and Apple Retail Italia a total of $1.2 million for “unfair commercial practices.” According to The Wall Street Journal, Apple’s Italy-based retail stores were fined €500,000 ($653,000) for not providing customers with adequate information about its AppleCare Protection Plan warranties, and an additional €400,000 ($523,00) for not being completely transparent about the length of product guarantees. The fines are a bit surprising, considering that Apple is typically praised for customer satisfaction in the United States. Apple has not commented publicly on the matter.

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Microsoft is reportedly in talks to partner with Chinese retailer Suning in an effort to distribute Windows Phones throughout the country. Suning has more than 700 stores in China and Microsoft is rumored to have agreed to give the retailer first dibs on Windows Phone and upcoming Windows 8 devices, Chinese news source QQ Finance reported recently. The deal may be imminent although it remains unclear which Windows Phone models will be sold in the country. It is also unclear how vendors are involved with the talks. Microsoft currently has a small slice of the smartphone operating system market but a big push in China could help drive momentum as it continues to battle Android and iOS for consumer interest. Research firms IDC and Gartner both predict that Windows Phone will have the second largest operating system share by 2015. Pyramid Research has even suggested the OS will surpass Android’s global share by 2013 driven by Microsoft’s new partnership with Nokia.

[Via WinRumors]

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Brick and mortar shopaholics have so few places to turn for an adrenaline rush these days thanks to the advent of online shopping, but Black Friday always promises to be a battle that tests even the most seasoned shopper’s will. Anxious consumers line up early outside their retailers of choice and prepare to push, shove, crawl and even trample their way to some of the deepest discounts of the year. It’s no holds barred and things are bound to get dirty, but those who plan to work off their Thanksgiving feasts by throwing elbows and sprinting from store to store had better get their game faces on and go in prepared. Following the break, we lay out all the top tech retailers in the country and link you to the tools you need to map out your plan of attack. Good luck, be safe, and Godspeed.

Best Buy Black Friday 2011 sale details

Doors open: 12:00 AM

BJ’s Wholesale Club Black Friday 2011 sale detail

Doors open: 7:00 AM

Costco Black Friday 2011 sale details

Doors open: 9:00 AM

GameStop Black Friday 2011 sale detail

Doors open: 12:00 AM

Kmart Black Friday 2011 sale detail

Doors open: 5:00 AM

RadioShack Black Friday 2011 sale details

Doors Open: 5:30 AM

Sam’s Club Black Friday 2011 sale details

Doors open: 5:00 AM

Staples Black Friday 2011 sale details

Doors open: 6:00 AM

Target Black Friday 2011 sale details

Doors open: 12:00 AM

Walmart Black Friday 2011 sale details

Doors open: 12:00 AM

Bonus

For those who would rather not fight through angry mobs of sale-hungry consumers, feel free to enjoy Amazon’s Black Friday and Cyber Monday deals from the comfort of your desk or couch.

Amazon Black Friday 2011 sale details

AmazonWireless Black Friday 2011 sale details

Doors open: Always

While information about Apple’s new iOS app and retail plans have leaked out in various forms over the past few weeks, we now have the whole story thanks to a trusted source. On Thursday, Apple’s new retail store app for iOS will launch, and it will bring two major features with it. First, it will enable online ordering with retail store pick up. This has already started happening in a few stores in California and New York City Apple stores as well, and more stores will go live on Thursday. Hit the jump for details on what happens when you place an order through the app to pick up in a retail store nearby.

• If a customer orders an in-stock product, pick up will be available approximately 12 minutes after completing the order. Why 12 minutes? Well, the order goes through the system to the designated Apple Store in about 3 minutes. Apple’s back-of-house employees have 2 minutes to set all of the products aside on a shelf from the minute it was ordered. There is then a 7-minute grace period for employees to get everything else in order. Around 12 minutes after purchasing, customers will be able to walk into the Apple Store, skip lines, skip registers, get their products, sign for them and leave. We’re told Apple is really excited about this, and it’s something customers have been seeking for a while.
• If a customer orders something that a retail store does not have in-stock, like a custom-configured machine, an accessory the store does not carry, or something like an engraved or gift-wrapped device, the customer will be a given a pick-up date right after the purchase is completed. Everything will have free shipping when sent to an Apple retail store. Once the order arrives at the Apple Store and is available for pickup, a push notification will be sent to the customer through the Apple Store app, letting him or her know the order is ready. We’re told the same 12-minute timeframe applies here as well: 12 minutes from the time the push notification is received, the customer’s order should be waiting to be signed for.
• We have been told customers who opt to purchase online or through the app will be given priority when they walk into the store over a customer waiting for a retail specialist, and that Apple expects the majority of customers over the next few years to use the in-store pick up option as their default method of buying products. This will help with foot traffic in retail stores while also reducing the cost of shipping for Apple, and possibly even reducing the number of stores Apple needs to open to accommodate sales.
• Apple will offer customers the ability to return items purchased online to retail stores.
• Lastly, we’re told that Apple will be attributing revenue from items purchased in this manner to the retail store where the items are delivered and retrieved. This should help create new job opportunities since hiring at Apple Stores is based on sales. Apple is reportedly expecting a 30% increase in sales at retail stores from this program, and it will only be available in the U.S. for now.

The other major feature coming in Apple’s new app? Customer self check-out at retail stores. This is a huge deal and Apple is the first to be able to put it together. Here is how this will work: after you find the item you want to buy, like an accessory, you launch the Apple Store app on your iOS device and there will be an option to buy a product in the store. You scan the product with the camera on your device in the app, click purchase, and it will charge whatever credit card is associated to your Apple ID. You then just walk out of the store. Yes, we have been told that Apple will not be checking purchases which seems hard to believe, but this self check-out option will launch Thursday worldwide at all Apple retail stores.

You are not alone if you walk into brick and mortar stores to check out a product only to turn around and buy it online later. According to a new study from Retrevo, 66% of all shoppers and 78% of smartphone owners “look at a product in a store” and then purchase the product online from a different outlet. Consumer electronics stores are taking the biggest hit; 58% of smartphone owners decide to buy products first spotted in a store online. Retrevo suggests that is because consumers feel overwhelmed with the amount of products on display. 53% of the respondents who walked into a retail electronics store could not decide what to buy. 30% of those shoppers said it was because they did not have an adequate amount of information on the products they were searching for and sales staff were of no help. Smartphones could help save stores such as Best Buy, however. 42% of shoppers use their phones to check prices while in store, 25% use smartphones to find coupons and 29% read reviews and product specs on their phone. Retrevo suggests that a carefully crafted application that provides access to the aforementioned information could help consumers stay in stores instead of heading home and buying goods online.

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Best Buy will hire fewer temporary workers for the 2011 holiday season compared to last year, Reuters reported on Wednesday. The nationwide electronics retail chain will take on 15,000 new temporary employees, compared to the 29,000 it hired in 2010. Best Buy is not alone in its decision. Research from the management consulting firm Hay Group suggests that about 25% of U.S. retailers will hire fewer temporary employees this holiday season. “The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays,” Best Buy CEO Brian Dunn told Reuters. Dunn said his company will carry the iPhone 5 and noted Best Buy expects tablets, smartphones and accessories for both to be a sales catalyst this holiday season.

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An all-hands day has reportedly been called for nationwide T-Mobile stores on September 24th. As per a purported internal memo obtained by TmoNews, T-Mobile corporate has instructed managers to “plan for increased store business and maximum floor coverage on Saturday September 24.” Initial speculation suggested the memo may involve the iPhone 5, but that seems highly unlikely. First and foremost, some reports refer to the all-hands day as a meeting where employees may be preparing for an iPhone launch, however the memo instead refers to it as a high-volume day for T-Mobile retail stores. The launch of Apple’s iPhone 5 would certainly pull in high volumes of foot traffic, of course, but it is not expected to be released until early to mid-October. Moreover, it’s safe to say T-Mobile is expecting more than one single day of high-volume retail traffic if and when it launches the iPhone 5, and the handset will likely launch ahead of the weekend when it finally does hit store shelves. We’re not sure what T-Mobile has in store for the 24th, but odds are definitely not in the fifth-generation iPhone’s favor.

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