Best Buy Management Lunch: 3 Takeaways

Following a lunch with Best Buy Co Inc BBY management, Barclays’ Matthew McClintock mentioned that the company has three key areas of priority.

McClintock maintains an Overweight rating on Best Buy, with a price target of $45.

The management lunch on June 22 was attended by CEO Hubert Joly, former CFO Sharon McCollam, current CFO Corie Barry, V.P. of Investor Relations Mollie O’Brien and Director of Investor Relations and Enterprise Reporting Jim Roslansky.

3 Key Areas

McClintock noted that the company was focused on three key areas: “1) addressing the gap between what technology can do and consumers' understanding of that technology; 2) improving efficiencies; and 3) accelerating growth.”

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The analyst stated that Best Buy’s cost reduction initiative was focused on creating a leaner structure that would run more seamlessly. However, although the first phase of Renew Blue did reduce layers, many of the gains would be one-time events.

On the other hand, the company continues to guide to flattish top-line growth, while noting that acceleration was likely to be driven by returns on capital invested.

“Management discussed the potential of its In Home Advisors program, which it believes could have an outsized impact on both services revenue and product sales as consumers develop a better understanding of the technology available to them,” according to the Barclays report.

McClintock said he was impressed with current CFO Corie Barry and was comfortable with the transition plan.

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Posted In: Analyst ColorLong IdeasNewsGuidanceReiterationEventsAnalyst RatingsTrading IdeasBarclaysCorie BarryHubert JolyJim RoslanskyMatthew McClintockMollie O'BrienRenew BlueSharon McCollam
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