Remember Best Buy?
That’s the big box electronics retailer which was basically left for dead last year.
The stock is up 10% in the pre-market after earnings beat expectations.
What’s amazing is the medium-term chart. Since the beginning of 2013 — when the stock hit its bottom — the company is up nearly 3-fold. And this chart doesn’t even have this morning’s big gain.
Here are the three paragraphs from today’s earnings report which speak to why optimism in the company is growing:
Hubert Joly, Best Buy president and CEO, commented, “In November at our investor meeting, we talked about the two problems we had to solve: declining comparable store sales and declining operating margins. Since that time, the resolution of these two problems has become our Renew Blue rallying cry and the organisation’s goals and objectives have been prioritised accordingly. While we are clear there is much more work ahead, we have made measurable progress since we unveiled Renew Blue last year, including near flat comparable store sales, substantive cost take outs, and better-than-expected earnings in the past three consecutive quarters.”
Joly continued, “As expected, Domestic comparable store sales were down 0.4%. But this was driven by short-term disruptions caused by the retail deployment of the Samsung Experience Shops, Windows Stores, and floor space optimization, as well as our continuing rationalization of non-core businesses. Excluding these impacts, Domestic comparable store sales were flat to slightly positive for the quarter. In addition, we delivered a better-than-expected non-GAAP diluted EPS of $US0.32.”
Joly concluded, “During the second quarter, we continued to make substantial progress on our Renew Blue priorities. This progress included (1) driving a more than 10% increase in Domestic comparable online sales; (2) improving our Net Promoter Score; (3) enriching our retail customer experience through the rollout of our Samsung Experience Shops and Windows Stores; (4) piloting our “buy online – ship from store” initiative in 50 stores; and (5) eliminating an additional $US65 million in annualized costs — bringing our “nine-month” total of annualized cost reductions to $US390 million toward our target of $US725 million.”