Best Buy FY 4Q15 Earnings Call Notes

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Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Big screen TVs were strong but tablets were weak

“”better-than-expected results as we capitalized on the product cycles in large screen televisions and mobile phones. These two categories were the primary drivers of our year-over-year revenue growth, and more than offset weakness in the tablet category which was impacted by material industry declines”

Facing some industry pressure this year

“we will also be facing industry and economic pressure that we discussed last quarter in our holiday sales press release that we expect to impact our business including more rapidly declining average spending prices in key product categories, weak industry demand in certain product categories, declining demands and in price pressures from our extended warranties and increasingly competitive and costly cost in the service expectations like free and faster shipping.”

Making investments in infrastructure

“the investments that we’re making now. These are much more structural and they will actually come incrementally. As an example some of the work that we’re doing in the supply chain, we will roll out a portion this year, a portion next year and a portion after that. Returns replacements and damages is another one. We will create the capability online this year, then there are things that we will add to the system that we’ll implement going into Q4 and that will go into next year and year after. ”

Tablet decline was substantial

“We see the tablet decline was the substantial and we need to make sure that it’s in perspective. In Q4 we saw the tablet category down 30% approximately the NPD reported category down 30% and at any point in time Best Buy is going have a 20% plus share of that category. So it has a significant impact on our top line, has a lesser impact on our profitability’s. As you know it’s not one of our most profitable categories but certainly it drives a lot of traffic to our stores.”