Best Buy’s (BBY) CEO Hubert Joly on Q2 2015 Results – Earnings Call Transcript

Source: Seeking Alpha

Best Buy Co (NYSE:BBY)

Q2 2015 Earnings Conference Call

August 26, 2014 08:00 ET


Mollie O’Brien – VP, IR

Hubert Joly – President & CEO

Sharon McCollam – CAO & CFO


Simeon Gutman – Morgan Stanley

David Schick – Stifel Nicolaus

Alan Rifkin – Barclays Capital

Aram Rubinson – Wolfe Research

David Magee – SunTrust Robinson Humphrey

Mike Baker – Deutsche Bank

Brian Nagel – Oppenheimer


Welcome to Best Buy’s Second Quarter Fiscal Year 2015 Earnings Conference Call. (Operator Instructions). I would now like to turn the call over to Mollie O’Brien, Vice President, Investor Relations.

Mollie O’Brien

Good morning and thank you. Joining me on the call today are Hubert Joly, our President and CEO; and Sharon McCollam, our CAO and CFO. As usual, the media will be participating in this call in a listen-only mode.

This morning’s conference call must be considered in conjunction with the earnings release that we issued earlier today. They both contain non-GAAP financial measures that exclude the impact of certain business events. These non-GAAP financial measures are provided to facilitate meaningful year-over-year comparisons, but should not be considered superior to as a substitute for and should be read in conjunction with the GAAP financial measures for the period. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and an explanation of why these non-GAAP financial measures are useful can be found in this morning’s earnings release.

Today’s earnings release and conference call also include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements address the financial condition, results of operations, business initiatives, growth plans, operational investments and prospects of the company and are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company’s current earnings release and SEC filings for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call.

ALSO READ:   The Social Responsibility of Business: Alex Edmans (Full Transcript)

In today’s earnings release and conference call, we refer to consumer electronics or CE industry trends. The CE industry, as defined by the NPD Group, includes TVs, desktop and notebook computers, tablets not including Kindle, digital imaging, and other categories. Sales of these products represent approximately 65% of our domestic revenue. It does not include mobile phones, gaming, movies, music, appliances or services.

I will now turn the call over to Hubert.

Hubert Joly

Good morning everyone and thank you for joining us. I will begin today with an overview of our second quarter results and then update you on the progress we’re making against our Renew Blue priorities. Then I will turn the call over to Sharon for additional details on our quarterly results and commentary on our financial outlook. So first, our financial results. In the second quarter we delivered $8.9 billion in revenue and $0.44 in non-GAAP diluted earnings per share versus $0.32 last year. The ongoing benefits of our Renew Blue cost reduction and other SG&A cost containment initiatives drove these better than expected results.

On the top line as expected sales in the NPD track consumer electronics category declined 2.5% in-line with our domestic comparable sales decline of 2.0%. Like other retailers and as reflected in this quarter’s performance we continue to see a shift in consumer behavior. Consumers are increasingly researching and buying online. As a result traffic to our brick and mortar stores continue to decline and yet our in-store conversion and online traffic continue to increase due to the execution of our Renew Blue strategy which is in direct alignment with this shift. Our Renew Blue strategy is designed to grow our online business, enhance our in-store customer experience and leverage out multi-channel capabilities or deliver to our customers great advice, service and convenience at competitive prices in the channel they want to be served. Each of these initiatives contributed to our second quarter results.

ALSO READ:   Visa's (V) CEO Charles Scharf on Q3 2014 Results - Earnings Call Transcript

And so I’m pleased to update you today on the progress we’re making against our renewable transformation road-map which is built around following areas. Merchandising, marketing, online, stores, Geek Squad services, supply chain, cost structure and employee engagement. So first of these areas is merchandising. We believe we’re raising the bar in our retail channel by continuing to roll out compelling and differentiated customer experiences across major categories such as appliances, home theater and mobile. In the appliance category we opened 18 new Pacific Kitchen & Home stores within a store on our on track to end the year with approximately 115 stores versus 67 last year.

Pages: First |1 | ... | | Last | View Full Transcript

Leave a Comment

Scroll to Top