September 25, 2019
Best Buy is projecting strength and growth heading into an investor event Sept. 25 in New York.
The consumer electronics retail giant’s “Building the New Blue: Chapter Two” under new CEO Corie Barry includes revised financial targets through 2025.
The company plans to trim $1 billion in costs over the period, while boosting revenue to $50 billion, up from 2020 guidance of $43.1 billion to $43.6 billion.
Heady goals in a retail environment under constant siege from ecommerce giants such as Amazon and Walmart, among others.
Indeed, Best Buy last month revised downward fiscal-year revenue estimates — largely due to ongoing tariff concerns with China.
The company, like most CE retailers and manufacturers, relies in large part on Chinese-made products, including its line of Insignia TVs.
Second-quarter entertainment same-store sales dropped 13.7% compared to a 8.5% increase a year ago. The business unit includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.
Domestic entertainment revenue topped $441 million, down from $608 million during the previous-year period. The segment represented 5% of Best Buy’s domestic revenue compared to 7% last year. Best Buy closed 13 large format stores in the period.
Regardless, CFO Matt Bilunas remains optimistic.
“In this next chapter, our focus continues to be top-line growth,” Bilunas said in a statement. “We also believe the initiatives we will outline today … along with continued focus on cost reductions, will result in operating income rate expansion over the five-year time frame.”