Best Buy Co., Inc.

Sector: Electronics retail Countries of operation: Canada and the US (primary market) Key product categories: Appliances, consumer electronics, entertainment software, home-office products and related services Annual Metrics [caption id="attachment_152143" align="aligncenter" width="700"] Fiscal year ends January 31 of the same year
TTM period ended April 30, 2022[/caption]   Summary Founded in 1966 (originally named Sound of Music) and headquartered in Richfield, Minnesota, Best Buy is a leading provider of technological products, services and solutions. It operates physical stores, websites and mobile applications, with the US as its primary market. The company has two reporting segments: Domestic and International. The Domestic segment operates in all states, districts and territories of the US, across various banners including Best Buy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively Magnolia and Pacific Kitchen and Home, as well the websites bestbuy.com and greatcall.com. The International segment comprises operations in Canada across banners including Best Buy, Best Buy Express, Best Buy Mobile and Geek Squad, as well as bestbuy.ca. Company Analysis Coresight Research insight: Best Buy saw 9.5% year-over-year sales growth in fiscal 2022, driven by the strength of its multichannel capabilities and its recent strategic investments to remain customer-centric, digitally focused and efficient. The company has rolled out trials including a paid membership program, Best Buy Beta. It has also enhanced in-store experiences and remodeled many of its physical spaces. These initiatives are crucial for the company to remain relevant and thrive in the new retail landscape, where customers expect to interact seamlessly through both digital and physical channels. The company also offers unique benefits for its customers under its Total Tech membership, launched in in October 2021, wherein the customers get product discounts and periodic access to hard-to-get inventory, free delivery and installation, free technical support and extended warranties on products. Best Buy has enrolled more than 1 million Total Tech members, and expects to double the number of members by the end of fiscal 2025. We expect Best Buy Total Tech to drive longer-term sales value for the company.

Tailwinds

Headwinds

Sustained increase in digital demand to remain a major source of revenue Strong omnichannel capabilities differentiate the company in the new retail landscape Growing structural increase in the need for technology Favorable customers response to Total Tech membership Elevated social media engagement with the launch of Best Buy Ads, which helps customers discover new and relevant products, services and offers Large footprint in the US with 1,137 stores

Highly competitive US retail industry poses stiff competition Demand for laptops, webcams and other computer accessories for home offices is set to drop in 2022 with the reopening of offices Continued supply chain and freight disruption

  Strategy In its annual 10-K report dated March 18, 2022, Best Buy outlined its plans to focus on the following initiatives to meet customers’ expectations. 1. Expansion of categories

• In the fitness and wellness category, implement a larger, more premium experience in 90 stores over the next 18 months with dedicated zones for vendors.
• In the personal electronic transportation category, add physical assortment to 900 stores and a more premium experience in 90 stores over the next 18 months.
• In the outdoor living category, accelerate business nationwide with the acquisition of Yardbird, a leading premium outdoor furniture company. Yardbird products will be seen in spring 2022 in the Southern California market.

2. Technology enhancement

• Introduce new technology tools to support both customers and employees.
• Help enrich and save lives through technology in the healthcare segment.

3. Expand its physical footprint

• Double the number of outlet stores with open box, clearance, end of life and otherwise distressed large product inventory across major appliances and televisions in fiscal 2023.
• Test expanding its assortments by adding computing, gaming products and mobile phones.
• Trial store formats of 15,000, 25,000 and 35,000 square feet.
• Open a store spanning 5,000 square feet in summer 2022.

Revenue Breakdown (FY22)   Company Developments

Date	Development
May 11, 2022	Best Buy announces that it will open four new outlet stores, which feature open-box and clearance items at reduced prices, this summer and fall in select cities across the US.
May 6, 2022	Best Buy expands its health, outdoor living and transportation categories in nearly 300 Best Buy stores and BestBuy.com.
April 20, 2022	Best Buy launches a home-collection recycling service, making it easier for customers to dispose of old tech while protecting the environment.
March 11, 2022	Best Buy and Buddy Technologies enter into a new vendor program agreement (VPA) for 2022, with several adjustments to better address the changing retail environment and further grow sales across the US.
March 8, 2022	Current Health (acquired by Best Buy in October 2021) announces new platform features that deepen its support for chronic care management, enabling healthcare organizations to manage care for all healthcare consumers, regardless of clinical condition or acuity level, within a single platform.
March 3, 2022	Best Buy announces a share repurchase program. Under the program, the company will repurchase up to $5 billion in common shares.
February 24, 2022	Current Health announces an integration with Zoom, allowing health systems and their patients to launch the video conferencing service directly from its care-at-home platform.
January 4, 2022	Best Buy launches a new advertising business, Best Buy Ads, which will help customers discover new and relevant products, services and offers.
December 14, 2021	Best Buy partners with RangeMe, an online sourcing platform that connects Best Buy with more than 200,000 potential brands and their products, to improve diversity in its network of suppliers.
November 23, 2021	Best Buy expands its outdoor living section with the acquisition of Yardbird, a leading direct-to-consumer (DTC) company that specializes in premium outdoor furniture.
November 22, 2021	Best Buy launches store pilots in Charlotte, North Carolina, wherein customers can try out a number of new shopping experiences.
November 2, 2021	Best Buy invests in solar energy, with the aim of reducing its impact on the environment. The company aims to reduce its carbon emissions by 75% by 2030 and achieve net-zero emissions by 2040.
October 27, 2021	Best Buy expands its technology and advanced analytics teams with the opening of a new office in Atlanta.
October 12, 2021	Best Buy enters into an agreement to acquire Current Health Limited on October 10, 2021.
June 24, 2021	Best Buy commits to spending at least $1.2 billion with Black, Indigenous and people of color (BIPOC) and diverse businesses by 2025. The pledge includes plans to increase all forms of spending with BIPOC businesses across the company—from how it brings goods and services to stores to its supply chain to where and how it advertises.
May 19, 2021	Best Buy announces a commitment of $10 million to build a new network of opportunities for youth in disinvested communities in Los Angeles.
April 28, 2021	Best Buy announces that its reverse logistics center in Chino, California, earned Best Buy’s first TRUE certification for zero waste. Over the last year, the supply chain facility was able to divert more than 99.67% of its solid waste from landfills.
April 7, 2021	Best Buy pilots a new paid membership program, “Best Buy Beta,” in select markets that provide customers with an array of benefits, including exclusive member pricing, unlimited Geek Squad technical support, up to two years of protection on most product purchases, free standard shipping and delivery, and free installation on most products and appliances.
March 4, 2021	Best Buy commits $44 million to expand college prep and career opportunities for BIPOC students.
March 2, 2021	Best Buy announces the appointment of Steven E. Rendle, a leading executive in the apparel industry to its board of directors, effective March 18, 2021.
January 8, 2021	Best Buy announces the appointment of Mario J. Marte, a leading e-commerce executive, to its Board of Directors, effective immediately.
December 7, 2020	Best Buy expands its delivery options during the holiday season, including extending its curbside pickup hours and increasing its alternate pickup options to 16,000 locations across the country.
November 17, 2020	Best Buy announces investment in clean energy as part of its sustainability goals in partnership with the new Little Bear Solar Project and renewables firm Longroad Energy. It plans to produce 480,000 megawatt hours of electricity annually for the local power grid—enough to power the equivalent of approximately 715 Best Buy stores.
October 19, 2020	Best Buy partners with Accenture to advance Best Buy’s strategic priorities by accelerating technology innovation and growing technology talent at the company.

  Management Team

• Corie Barry—CEO and Director
• Matt Bilunas—CFO
• Brian Tilzer—EVP and Chief Digital and Technology Officer

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Source: Company reports/S&P Capital IQ