The following best buy bby conference call took place on may 21, 2015, 0 am et. As a reminder, this call is being recorded for playback, and will be available by approximately 11 am eastern time today. I would now like to turn the conference over to mollie o'brien, vice president, investor relations.

Joining me on the call today are hubert joly, our president and ceo, and sharon mccollam, our cao and cfo. This morning's conference call must be considered in conjunction with the earnings press release we issued this morning. Today's release and conference call both contain non gaap financial measures that exclude the impact of certain business events. These non gaap financial measures are provided to facilitate meaningful year over year comparisons, but should not be considered superior to, as a substitute for, and should be read in conjunction with the gaap financial measures for the period. A reconciliation of these non gaap financial measures to the most directly comparable gaap financial measures, and an explanation of why these non gaap financial measures are useful, can be found in this morning's earnings release. Today's earnings release and conference call also include forward looking statements within the meaning of the private securities litigation reform act of 1995. These statements address the financial condition, results of operations, business initiatives, growth plans, operational investments and prospects of the company, and are subject to risks and uncertainties that could cause actual results to differ materially from such forward looking statements.

Please refer to the company's current earnings release and sec filings for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward looking statements to reflect events or circumstances that may arise after the date of this call. In today's earnings release and conference call, we refer to consumer electronics industry trends. The consumer electronics industry as defined by the npd group includes tvs, desktop and notebook computers, tablets not including kindle, digital imaging and other categories.

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It does not include mobile phones, gaming, movies, music, appliances or services. During the quarter, as announced on march 28, the company consolidated the future shop and best buy brands in canada under the best buy brand. The consolidation is expected to have a material impact on all of our canadian retail stores and websites on a year over year basis. As such, all canadian revenue has been removed from the comparable sales base, and international no longer has a comparable metric. Therefore, enterprise comparable sales will be equal to domestic comparable sales, until international revenue is again comparable on a year over year basis. I'll begin today with an overview of our first quarter results, and i will then provide highlights of the progress we've made on our fy16 priorities, and then turn the call over to sharon for additional details on our quarterly results and commentary on our financial outlook.

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Enterprise revenue of $8.6 billion, in addition to our non gaap operating income rate and non gaap diluted eps, all exceeded our expectations during the quarter, due to a stronger than expected performance in the domestic business. Our non gaap operating income rate of 2.6% was flat to last year, including approximately 35 basis points of increased costs to support our investments in future growth initiatives, and our non gaap diluted eps of $0.37 was up 6%. In the domestic business, against the backdrop where the ndp reported consumer electronic categories which represent approximately 65% of our revenue were down 5.3%, our comparable sales in contrast excluding the impact of installment billing declined only 0.7%, as we continue to take advantage of strong product cycles in large screen televisions and iconic mobile phones, and continued growth in the major appliance category.

From the wall street journal article fast paced best seller: author russell blake thrives on volumes in 2013, self published books. Nyse:bby q3 2015 results earnings conference call november 19 2015, 0 am et executives mollie o'brien vice president, investor relati best buy, gamestop, tiffany, valspar and toll brothers crashed last monday and had mixed performances post earnings. Best buy nyse:bby reported earnings upside versus the street of $.06 but comps were at the low end of planned 0 +lsd 0 3. non gaap diluted eps from continuing operations of $1.48 gaap diluted eps from continuing operations of $1.47 annualized renew blue cost reductions reach $1.02 billion hubert joly, best buy president and ceo, commented, in the fourth quarter, our teams delivered positive comparable sales, improved profitability and continued progress in our renew blue transformation. This resulted in a 1.3% increase in revenue to $14.2 billion and a 23% increase in non gaap diluted eps to $1.48 versus $1.20 last year, primarily driven by growth in the domestic segment. A compelling merchandise assortment and strong multi channel execution drove these better than expected results as we capitalized on the product cycles in large screen televisions and mobile phones.

These two categories were the primary drivers of our year over year revenue growth, and more than offset weakness in the tablet category which was impacted by material industry declines. Joly continued, on a full year basis, we continued to make progress against the two main problems we had to solve that we outlined in november of 2012 – declining comps and declining operating income rate. In fiscal 2015, we stabilized comparable sales and delivered incremental non gaap sg amp a reductions of approximately $420 million, resulting in non gaap operating income rate expansion of 80 basis points and a 26% increase in non gaap diluted eps to $2.60.

We also ended the year with $3.9 billion in cash, cash equivalents and short term investments versus $2.6 billion last year. In light of this progress, we were pleased to announce this morning, in a separate press release, our plan to return excess capital to shareholders including a special, one time dividend, an increase in our regular quarterly dividend and the resumption of our share repurchase program. The announcement demonstrates our commitment to returning excess capital to our shareholders, while preserving our strong balance sheet and our ability to continue to invest in the growth of our business. Joly continued, as we look forward to fiscal 2016 and beyond, it is imperative that we continue to focus on driving comparable sales and improving our operating income rate while funding investments in our future.

As we’ve previously shared, we are pursuing a strategy that is focused on delivering advice, service and convenience at competitive prices to our customers. Within this strategy, we are focused on driving a number of growth initiatives around key product categories, life events and services. To drive these initiatives, we are pursuing and investing in the transformation of key functions and processes. We will also, in fiscal 2016, be facing industry and economic pressures on our business related to deflationary pricing and weak industry demand in certain product categories that we discussed last quarter.

While these investments will put pressure on our fiscal 2016 operating income rate, we believe they leverage our executional momentum and will allow us to build a differentiated customer experience and a foundation for long term success. Sharon mccollam, best buy evp, cao and cfo, commented, in fiscal 2016, we expect the financial impact of the investments and economic pressures that hubert just described to begin in q1 and continue throughout the year. From a topline perspective, our current expectation is consistent with the outlook we provided in our holiday sales release and continues to reflect limited visibility to major new product launches. As such, q1 and q2 enterprise revenue and comparable sales growth, excluding the estimated impact of installment billing, is expected to be in the range of flat to negative low single digits. This change in trend versus q4 is primarily driven by ongoing material declines in the tablet category, in addition to typical holiday momentum around high profile, giftable products not continuing post holiday. We will also be anniversarying approximately 80 basis points of enterprise growth in the first half of last year driven by the chain wide rollout of ship from store.

From a non gaap operating income rate perspective, we are also reiterating our outlook for q1 and q2 of down approximately 30 to 50 basis points, including lapping last year’s q1 15 basis point one time benefit associated with the new credit card agreement. This decline reflects the economic and growth pressures that we just outlined, the investments we are making to drive our fiscal 2016 growth initiatives and our anticipated sg amp a inflation. Additionally, we expect the q1 and q2 non gaap continuing operations effective income tax rate to be in the range of 39% to 40%. This morning also issued a separate press release announcing the company’s plan to return capital to shareholders. domestic segment fourth quarter results domestic revenue of $12.70 billion increased 3.2% versus last year, despite a 3.2% decrease in npd reported consumer electronics categories 4. From a merchandising perspective, comparable sales growth in televisions, mobile phones excluding the impact of installment billing 2 and computing was significantly offset by a material decline in tablets. The growth in mobile phones was primarily driven by higher year over year selling prices.

Domestic online revenue of $1.72 billion increased 9.7% on a comparable basis due to substantially improved inventory availability made possible by the chain wide rollout of our ship from store capability in january 2014. higher conversion rates and increased traffic driven by greater investment in online marketing also contributed to the comparable online sales growth. This growth, however, was substantially offset by material industry softness in tablets, a category with high online penetration, and a channel shift in mobile phone revenue that resulted from customer enthusiasm for installment billing plans which can only be activated today in our retail stores. These increases were partially offset by structural investments in price competitiveness, particularly in accessories. domestic selling, general and administrative expenses sg amp a domestic sg amp a expenses were $1.95 billion or 15.4% of revenue versus $1.96 billion or 16.0% of revenue last year. On a non gaap basis, sg amp a expenses were $1.95 billion or 15.3% of revenue versus $1.91 billion or 15.5% of revenue last year. In dollars, non gaap sg amp a increased $41 million primarily driven by higher incentive compensation and renew blue investments in customer facing initiatives. These increases were partially offset by the realization of renew blue cost reduction initiatives and tighter expense management throughout the company.