Best Buy reported this week and the overall figures are a testament of what can be accomplished with incumbent brick and mortar companies. Here's our earnings dashboard.
It has now been 8 straight quarters of positive same-store sales growth. The company with Hubert Joly and Corie Barry leading the charge has successfully improved its market position. The strategy has been to provide best in breed services both in-store and online. As a retail customer of BestBuy, I think they have accomplished this.
Electronics as a category is always evolving with new form factors, new technologies, and various intricacies which only the avid technologist can keep up with. That is the problem, and Best Buy needed to focus on being that solution. They created and rolled out their in-home adviser program, total tech support subscription service, and further emphasized Geek Squad.
Also, they are looking to carve out a position within the health and wellness category. Best Buy acquired GreatCall, a leading connected health services provider. When they made the acquisition, GreatCall was already a profitable and growing business with annual revenue reaching over $300 million.
On top of the objectives to grow and stabilize, Best Buy trimmed weaker stores and cut costs dramatically across its footprint. "Renew Blue" which is what they called the cost-cutting strategy, was put in place to cut over $400 million of costs. They achieved this and more.
Overall BestBuy is a perfect example of turning the ship. Investors need to understand however that this plan was put in place in 2012, so 7 years ago. Transitions tend to take time, a long time. Have a great one!
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Sean D. Emory
Avory & Co. Founder & Chief Investment Officer
Disclaimer: This is not a recommendation for purchase or sale of any securities within the video. Avory is not a shareholder of some of the companies within, but this can change at anytime.
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