Best Buy (BBY) Sees FY21 Enterprise Revenue of $43B

Best Buy Co., Inc. (NYSE: BBY), a leading provider of consumer electronics products and services, will host an investor conference this afternoon to provide a more detailed overview of its Best Buy 2020: Building the New Blue growth strategy and discuss the company’s long-term financial outlook.

Best Buy Chairman and CEO Hubert Joly and other members of the executive team will discuss key insights gained from the company’s successful Renew Blue transformation, share the company’s analysis of the strategic landscape in which it operates and provide a closer look at key growth initiatives.

“Our Renew Blue transformation was about improving the customer experience and fixing what was broken,” Joly said. “Building on what we have accomplished, we are excited by the opportunities we have in this next chapter to grow the company by helping customers pursue their passions and enrich their lives with the help of technology, which is a much bigger idea and one that is rich with opportunities.”

In addition to Joly, Best Buy’s investor day speakers will include:

• Corie Barry, chief financial officer
• Shari Ballard, senior executive vice president and president of multichannel retail
• Mike Mohan, senior executive vice president and chief merchandising and marketing officer

The event will begin at 2 p.m. ET. A video webcast of the presentations and question-and-answer session will be available online at www.investors.bestbuy.com, both live and after the event.

Renew Blue recapWhen Best Buy unveiled its Renew Blue transformation strategy in November 2012, the company faced two fundamental problems: negative comparable sales and declining operating income rate.

The strategy worked. Comparable sales and operating income rate are up, non-GAAP earnings per share have grown at a compound annual growth rate of 8 percent and total shareholder return over the last five years was 263 percent, ranking in the top 10 percent of S&P 500 companies. Importantly, the company proved it was possible to win with a combination of competitive prices and a higher level of service.

Best Buy 2020 overviewLooking ahead, the company believes it is operating in an opportunity-rich environment, driven by innovation and customers’ need for help.

Best Buy 2020 is designed to take advantage of key growth opportunities by expanding what the company sells and evolving how it sells.

Examples of how Best Buy intends to expand what it sells include:

• Building a leading position in the smart home market, by continuing to expand its curated assortment, demonstrating new technology solutions in a meaningful way, and entering the solutions and services part of the market. By the end of October, the company will enhance the smart home areas in all of its stores; roll out its Best Buy Smart Home Powered by Vivint home automation and security offering to 450 stores; and add 1,500 dedicated smart home employees.
• Piloting a service, Assured Living, that uses technology to help adult children remotely check in on the health and safety of their aging parents. Now available in two markets, this pilot aims to create peace of mind for the children while allowing the parents to live and thrive independently.
• Launching Total Tech Support, a new Geek Squad offering that provides ongoing support for a customer’s tech, no matter where or when they bought it. This offering is available nationwide in Canada and at 200 stores in 10 U.S. cities.

Meanwhile, Best Buy is evolving how it sells to focus not on just selling products but solving customers’ underlying needs. The company will seek to accelerate its growth by continuing to improve the customer experience within and across channels, more effectively addressing customer needs in underpenetrated categories and building its in-home channel.

To that end, Best Buy recently expanded its In-Home Advisor program to all major U.S. markets. It now has 300 advisors who are specially trained to provide free in-home consultations to help customers find the right technology solutions for their unique needs.

Financial outlookTo support the Best Buy 2020 strategy, the company plans to make key investments in technology and people. It is committed to continuing to create efficiencies that help fund these investments and offset potential pressures.

Best Buy delivered $1.4 billion in cost savings over the last five years. And, as previously announced, it plans to drive an incremental $600 million in annualized cost savings by the end of fiscal 2021.

As discussed earlier this year in March, with Best Buy 2020, the company aspires to solve the following financial equation: gradually increase its rate of topline growth, create efficiencies to help fund investments and offset potential pressures, and build more predictable revenue streams from recurring revenues and stickier customer relationships.

Today Best Buy is setting new long-term financial targets for fiscal 2021:

• Enterprise revenue of $43 billion versus $39.4 billion in fiscal 2017, which was the last year of the company’s Renew Blue transformation
• Non-GAAP operating income1 of $1.9 billion to $2.0 billion versus $1.7 billion in fiscal 2017
• Non-GAAP diluted EPS1 of $4.75 to $5.00, which represents an 8 to 9 percent compound annual growth rate from fiscal 2017

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