Best Buy FY 4Q16 Earnings Call Notes

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Best Buy (BBY) Hubert Joly on Q4 2016 Results

We thrive on innovation cycles

“Best Buy is a specialty retailer that excels in an industry characterized by product innovation cycles. We are undeterred by this fact as we believe there will always be technology innovation. And our imperative is that in these cycles, we continue to deliver superior execution against what is in our control, recognizing that the cycles rarely align at any point in time.”

We are pleased with the state of the consumer

“Yeah, the U.S. consumer, we could spend the next 30 minutes on that. We are pleased with the mind and the spirit of the U.S. consumer, certainly compared to many other geographies outside of the U.S. Demand is there, you see it when you see the growth in appliances, continued growth in appliances, that is a very strong wave. In our category, I think we all have to bear in mind that demand is driven by supply, so when there’s great, exciting innovation you get that. Because most of what we sell is not the basic Maslovian need on the part of our customer. So this is an industry where great supply creates demand, and we’re excited about the technology waves that are coming above and beyond the softness that has existed in phones.”

There is clear demand for services from the consumer

“From a services standpoint, I would say two things. One is, there’s clear demand for help on the part of the customer. Now, the customer, all of us don’t always want to pay for service and we will provide and we’re providing service today in order to generate more demand, so when we have Magnolia system designers coming to your home that’s going to generate demand, but their visit is free and we’re happy to come to your home, everybody on the call, we’ll come to you. Tech support, however, above and beyond the self-help is something that customers are happy to pay for and we are seeing increased demand in this area”