Best Buy 3Q17 Earnings Call Notes

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Best Buy’s (BBY) CEO Hubert Joly on Q3 2017 Results

Reduction in TV ASPs boosting unit demand. Continued innovation

” the TV category is playing out pretty much as we expected. There is indeed a reduction of ASPs and the combination of reduced ASPs and great product is stimulating unit demand and in that context, I don’t want to talk so much about the competitors, but I can talk about us. The customer experience we provide combination of assortment, merchandising, the online experience and experience in the stores, our service capabilities is allowing us to continue to gain market share. These market share gains have slightly moderated, because it doesn’t continue forever but we’ve built a capability that’s quite unique. The other thing that we want to highlight and we’ve talked about it on previous calls, the cycle of this time is different from the time where TVs went to digital and it was a much more contained cycle. We see continued product innovation today and coming in the future and this continued product innovation allows us to appeal to the type of customers that we appeal to which are in part the leading edge and early adopters, provide this great experience and allows us to stay ahead of the game.”

Probably no change in the promotional environment

“Thank you, Brian for the question so is the promotional environment this year likely to be more subdued, short answer is no. I think it’s always promotional and our category as we all know is used by certain player as a way to attract traffic. So there sometimes it will be aggressive promotions – often times limited quantities, but it creates, so no – we cannot see any chance from that standpoint. Black Friday I think what until the game is played it’s hard to know but we do see a combination of a bit of spreading out but also peaks and valleys being higher and steeper as the consumer has been trained to shop when the prices are more promotional, so I don’t think that there is a material chance here.”

Exciting categories

“From a product standpoint, I think what’s exciting this year is that there’s a broad range of exciting categories across what I would characterize as some of our more traditional product categories like for example, TVs and computing the new TVs are just extraordinary and computing our teams have done a great job as well as these emerging categories, so around connected home, around wearable, around drones, around virtual reality, there’s many reasons to come and check our products.”