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Heard during Best Buy's holiday sales conference call

  • Execs with Best Buy (BBY) did little to shore up confidence in the retailer during their conference call this morning.
  • CEO Hubert Joly said the company had to live up to its early promises to customers which left it in a predicament when peers dropped prices.
  • The tone of the call is such that the company seems to be indicating its wants get back to its service value-added proposition which sets it apart from Amazon and stop playing the cut-throat game of protecting every basis point of market share.
  • BBY -29.5% premarket
  • Holiday sales conference call webcast
Comments (7)
  • pman6
    , contributor
    Comments (270) | Send Message
     
    haha.

     

    I wonder what the effect will be on the companies whose goods BBY sells.

     

    will people use this to predict that apple holiday sales tanked?
    16 Jan, 08:53 AM Reply Like
  • benitus
    , contributor
    Comments (1898) | Send Message
     
    I think that the sudden premarket plunge is just a play on BBY by the shorts. I'm guessing that it will probably bop back up to settle between $29 and $31. It used to be a volatile stock, so going back to its roots is no big deal. Now, if it does crash below $20, that's a big deal. Basically, BBY isn't going bankrupt any time soon (unless something else is going on that nobody knows about), as it's been there before and it does indeed have enough supporters and believers to bring it back up again.
    16 Jan, 09:00 AM Reply Like
  • Cranios
    , contributor
    Comments (27) | Send Message
     
    I'm not quite sure why anyone would buy consumer electronics from BBY, when there is Amazon? I buy items probably 2 to 3 times per week from Amazon, and wouldn't even THINK of visiting BBY unless there was something I needed TODAY, and seldom is the purchase of a consumer electronic item that urgent.
    I do think the CEO is correct in concluding that if you are going to support lots of real estate vs. Amazon which supports far less real estate, you are going to have to charge more for it and let the chips fall where they may. I don't know how many consumers will pay extra, but they need to find out whether the local retail model works anymore, or if they have to go the way of Radio Shack (that is, far smaller niche stores).
    This is particularly true considering that Amazon is allowed to operate without charging sales tax, and Wall St. allows them to raise capital while making almost no profit.
    16 Jan, 09:32 AM Reply Like
  • BigJ1260
    , contributor
    Comments (200) | Send Message
     
    Amazon is ruining some pretty good companies to have around
    unfair playing field when for some unknown reason they are not supposed to report any profits

     

    how do you compete against that ?
    16 Jan, 12:33 PM Reply Like
  • Holthusen
    , contributor
    Comments (600) | Send Message
     
    You have to wonder how much rope the investment community is going to pay out to Amazon before they start looking for profit. After all isn't profit the goal in a Capitalist Economy?
    17 Jan, 06:17 AM Reply Like
  • Cranios
    , contributor
    Comments (27) | Send Message
     
    Amazon isn't really ruining these companies, any more than Ford ruined the buggy manufacturers. Things change. Business models that once made complete sense, no longer make sense.
    In the part of the country where I reside, Best Buy "ruined" Rex Stores a couple decades ago. And, Sears. Home Depot and Lowes ruined the local hardware store. That in fact is called free enterprise... or, if one is foolish enough to let the communists dictate the phrases we use, "capitalism" - but I would prefer free enterprise.
    Amazon's end game is to build market share until they are dominant, and then they can raise prices a few percentage points on average and have a nice profit. Wall Street knows this is the game, and apparently believes they can do it.
    Personally I buy from whoever can give me the best deal, and get me the product most quickly. For most things, that is Amazon. But my daughter recently needed a fridge and I bought that online from Best Buy. My only advice is, make rational purchasing decisions and let the market sort out the winners and losers.

     

    17 Jan, 08:55 AM Reply Like
  • seanthome
    , contributor
    Comments (37) | Send Message
     
    Now that Best Buy does price match with Amazon, and Amazon charges sales tax for my state, I've started to buy products again at Best Buy. I'd imagine doing the price match with Amazon is killing BB margin's, but they got to get traffic in the store somehow.
    17 Jan, 04:04 PM Reply Like
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