Best Buy 3Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Comps up 2.4%

“Domestic comparable sales increase of 2.4%, excluding the 80 basis point estimated benefit associated with the classification of revenue for the new mobile carrier installment billing plans. Domestic online comparable sales increased 22%.”

More installment plans, higher SAP

“In mobile, despite major phone launches being quantity constrained, the adoption of installment billing plans continued to accelerate throughout the quarter. Within these plans, we saw higher average phone prices and higher attach rates of services and phone accessories. ”

Shift marketing dollars from TV to digital

“In marketing, we continued to shift marketing dollars away from TV and print to digital media and display campaigns including a successful traffic-generating back-to-school initiative”

There was a huge amount of demand for iPhone 6 but supply has been spotty

“Prior to this iconic launch, we saw continued pent-up demand. So the market dried up and had a significantly negative impact on our mobile revenue. Then at the launch we did quite well but then supply was uneven during the quarter. So that’s a positive followed by a negative.”

Week two and three of December were very bad last year

“you are right to highlight that week two and week three of December last year were quite extraordinarily bad, candidly not just for us, this was industry-wide. If you remember, you had a bit of a perfect storm last year with a rapid shift to online and traffic to the malls and the stores that was quite extraordinary. I think last year we all agreed was, there were so many unique factors that it’s going to be hard to replicate the kind of drama that we had last year.”

The promotional environment is intense

“The promotional environment is very intense. It is certainly not less intense. I’m not sure, if anything it’s probably a little bit more intense than last year. I think that all of you follow the sector, so I don’t need to point you to this or that player. Don’t know of course how much money people are spending, I don’t have access to their P&L, but the promotional season is off to a very vibrant start, I would put it this way.”

Our strong balance sheet has been a factor in attracting partners

“I think that we have an obligation to our vendors to maintain a strong balance sheet. When you look at the investment that our vendors have made in our stores in the last 12 months, 12 to 18 months, it is incredible, it is literally hundreds of millions of dollars that they have put into our stores to represent their customer experience. So we believe very strongly that our strong balance sheet has been one of the reasons why they have had great confidence in putting that kind of capital into their customer experience in our Best Buy stores.”