NEW YORK – Best Buy president/CEO Hubert Joly’s first formal presentation before the investment community received mixed reviews from analysts and did little to move the company’s share-price needle.
But while some attendees bemoaned the lack of a detailed turnaround plan – which Joly said could not be developed in the 10 weeks he’s been on the job – others including Janney Montgomery Scott’s David Strasser lauded the early efforts of the emerging management team.
“This is a company that under new leadership is not afraid to look inward, understand mistakes it has made in the past, and identify solutions,” he observed in a research note.
Describing the initial game plan as an aggressive, yet rational and coherent framework for success, Strasser specifically cited Joly’s “sense of urgency to drive change”; his streamlining of the organization from eight to three business units; the opportunity to further slash bloated corporate overhead; and plans for a world-class multichannel platform that can boost the company’s meager 1.3 percent conversion rate online.
Joly said Best Buy is also exploring lease options for products, and told Bloomberg News the following day that it might buy or license popular CE brands such as Hitachi or JVC as a way of developing exclusive merchandise.
Absent from the meeting was Best Buy’s newly named chief financial officer and chief administrative officer Sharon McCollam, who is widely respected for her operational track record at Williams-Sonoma, and whose appointment garnered praise from investors. She officially assumes her new post on Dec. 12.
“Both Sharon McCollam and Hubert Joly have demonstrated an ability to hit targets, rationalize costs and streamline operations in past jobs,” Strasser wrote, “and this opportunity has a lot of low hanging fruit before they even get to the tough stuff.”
The presentation, held in the Best Buy Theater in Manhattan’s Times Square, was delayed from Nov. 1 due to the impact of Hurricane Sandy.
Best Buy is scheduled to release its fiscal third-quarter financials on Nov. 20. It warned last month that comp sales could decline between 3.2 percent and 5.3 percent, and that earnings will likely fall “significantly below” last year’s results.
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