Best Buy on Thursday intends to reveal several aspects of its long-term strategy to drive its business forward. A key part of that strategy, according to the company, is to continue its all out assault on the mobile market. Best Buy revealed its intentions to open between 600 and 800 Best Buy Mobile stand-alone store locations in the U.S. over the next five years. The company also said it intends to double its $2 billion online business within three to five years, and it will open 400 to 500 new Five Star retail locations in China with the goal of doubling its $4 billion business over the next five years. Hit the break for the full press release.
BEST BUY OUTLINES ITS STRATEGY AND ACTIONS TO DRIVE SHAREHOLDER VALUE
MINNEAPOLIS – April 14, 2011 – Today, at a company-held meeting for the financial community, Best Buy Co., Inc. (NYSE: BBY) intends to outline its strategic growth plans for its domestic and international businesses.
Senior executives are expected to review the initiatives that will support the company’s strategic priorities, which focus on accessing a larger market, profitable new growth opportunities, and structural opportunities.
The company will share information about its strategic priorities aimed to capture new growth opportunities in key categories and channels; fund growth efforts through structural opportunities and improve returns:
– Access to a larger market.
- Best Buy foresees significant incremental opportunity in accessories, content, connections and services. The total current industry opportunity, estimated today at $420 billion, is more than 2.5x the traditional consumer electronics hardware marke
– Capturing new growth opportunities in key categories and channels.
- Significantly expanding Best Buy’s online presence in the United States, with a goal of doubling the current $2 billion online business within 3 to 5 years.
- Scaling Best Buy Mobile as part of the company’s multi-channel strategy with an estimated total of 600 to 800 Best Buy Mobile stand-alone stores in the United States within five years.
- Investing in proven international businesses such as Five Star, our profitable Chinese brand in the Best Buy family. Best Buy expects to grow to 400 to 500 Five Star stores in the next five years. The company believes it can more than double its revenues in China to $4 billion within five years.
– Funding growth efforts through structural opportunities.
- Maximizing the pricing and assortment across Best Buy’s U.S. channels to drive higher conversion and overall price impression for the brand.
- Driving returns in Best Buy’s U.S. stores through specific actions to improve store productivity while increasing points of presence, including an anticipated 10 percent reduction in US “big box” store square footage over the next three to five years, resulting in expected annual savings of $70 million to $80 million, when fully realized.
Fiscal 2012 Outlook
The company will reiterate its fiscal 2012 guidance as announced on March 24, 2011. The company will further discuss the following additional elements of its fiscal 2012 financial outlook:
- Projected 10 million U.S. Connections sold in fiscal 2012, driven primarily by Best Buy Mobile. (“Connections” defined as mobile phone, home broadband, mobile broadband and video service units)
- Anticipated free cash flow of $2 billion to $2.5 billion for fiscal 2012.
- Confirmation of current share repurchase activity and a goal of fully utilizing its existing share repurchase authorization of $1.3 billion in fiscal 2012, subject to market conditions and other factors.
Fiscal 2011 Results
In addition to the results previously announced on March 24, 2011, the company will discuss the following additional details regarding its fiscal 2011 performance (unaudited):
The Best Buy Investor and Analyst Day will be held today, Thursday, April 14, 2011, at the company’s corporate campus in Richfield, Minn. The conference will begin at 10:00 am CT and will be available in its entirety through a live webcast and replay on www.bby.com. Presentation materials also will be publicly available on the Investor Relations page of www.bby.com.