Recently,
Best Buy Company Inc
. (
BBY
), the leading specialty retailer of consumer electronic products,
announced the locations of few big box stores that it intends to
close, Associated Press reported.
The company will pull down shutters on some big box stores,
which are not contributing to its growth, while modifications of
others are also on the cards. The company announced the
closing of 50 U.S. Best Buy big box stores in fiscal 2013,
including six in Illinois, seven in California and six in
Minnesota.
Earlier, Best Buy announced a string of strategic measures to
boost its long-term profitability. With its multi-channel strategy,
the company intends to modify its store formats while increasing
its global footprints.
Best Buy, through its cost reduction program, intends to
generate $800 million in costs saving by fiscal 2015, including
$250 million in fiscal 2013. The company plans to open 100
U.S. Best Buy Mobile small format stores in fiscal 2013 and
increase the total number of such stores to 600-800 by fiscal
2016.
Going forward, Best Buy plans to accelerate the growth of its
business in China while boosting its connections and services and
digital capabilities. Best Buy expects to open 50 new Five Star
stores in China in fiscal 2013, while it plans to generate $4
billion in sales and increase the store count to 400-500 by fiscal
2016.
The company expects to generate a 15% increase in its Domestic
online sales in fiscal 2013. Moreover, it targets $4 billion online
sales by fiscal 2016. Revenues in Domestic segment services
category are expected to increase by 10% in fiscal 2013.
Connections in the U.S. are expected to rise by 15% in fiscal
2013, driven by growth in mobile phone, tablets and computing
connections.
Best Buy expects fiscal 2013 revenues between $50 billion and
$51 billion, while comparable store sales are expected to decline
by 2.1%. Adjusted operating income is anticipated to decrease
in the range of 4% to 11% compared with the prior-year
results.
Currently, we have a long-term 'Neutral' rating on the stock.
Moreover, Best Buy, which faces competition from
Wal-Mart Stores Inc
. (
WMT
), holds a Zacks #3 Rank that translates into a short-term 'Hold'
rating.
BEST BUY (
BBY
): Free Stock Analysis Report
WAL-MART STORES (
WMT
): Free Stock Analysis Report
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