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RENEW
BLUE
Best Buy Analyst and Investor Day November 13, 2012
FORWARD-LOOKING AND CAUTIONARY STATEMENTS: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management‟s current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “guidance,” “plan,” “outlook,” “opportunities,” and other words and of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forwardlooking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forwardlooking statements are the following: general economic conditions, changes in consumer preferences, credit market constraints, acquisitions and development of new businesses, divestitures, product availability, sales volumes, pricing actions and promotional activities of competitors, profit margins, weather, natural or man-made disasters, changes in law or regulations, foreign currency fluctuation, availability of suitable real estate locations, the company‟s ability to react to a disaster recovery situation, the impact of labor markets and new product introductions on overall profitability, failure to achieve anticipated benefits of announced transactions, integration challenges relating to new ventures and unanticipated costs associated with previously announced or future restructuring activities. A further list and description of these risks, uncertainties and other matters can be found in the company‟s annual report and other reports filed from time to time with the Securities and Exchange Commission, including, but not limited to, Best Buy‟s Annual Report on Form 10-K filed with the SEC on May 1, 2012. Best Buy cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made, and Best Buy assumes no obligation to update any forward-looking statement that it may make.
2
PRESENTATION OF FINANCIAL INFORMATION: The financial information included in this presentation is based on our old fiscal calendar for FY08 – FY10 and our new fiscal calendar for FY11 – FY13. Except for amounts used in the calculation of Return on Invested Capital (“ROIC”), all information is presented on a continuing operations basis. In addition, the financial information is presented on a non-GAAP basis. Such non-GAAP financial information should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial information reported in our 10-K, 10-Q and 8-K filings. For GAAP to non-GAAP reconciliations, please refer to the supplemental non-GAAP reconciliation schedule available on our website at www.investors.bestbuy.com.
3
AGENDA I. INTRODUCTION II. DIAGNOSIS III. RENEW BLUE
4
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
5
AGENDA I. INTRODUCTION II. DIAGNOSIS III. RENEW BLUE
6
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS
GREAT STRENGTHS
7
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY OPERATES IN A LARGE AND GROWING MARKET
U.S. CONSUMER ELECTRONICS AND APPLIANCES MARKET ($ billion)
CAGR +3.2%
FY09
FY10
FY11
FY12
Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater, digital imaging, connections, services and digital content. SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
8
MARKET GROWTH CONTINUES TO BE DRIVEN BY INNOVATION
INTRODUCTION DIAGNOSIS RENEW BLUE
U.S. RETAIL SALES BY CATEGORY Smartphones Tablets
Digital TVs
Notebooks Desktops
SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
9
BEST BUY IS THE OVERALL CATEGORY LEADER IN A HIGHLY-FRAGMENTED MARKET
48%
U.S. CONSUMER ELECTRONICS AND APPLIANCES EVOLUTION*
50%
2% 5%
49%
48%
1% Circuit 2% 5% City 6% 5%
4% 4% 5% 14% 15%
FY09
48%
Other
7%
8%
Amazon Target Sears Apple
15%
16%
15%
Walmart
17%
16%
16%
4%
3% 5%
FY10
5%
6%
FY11
5%
INTRODUCTION DIAGNOSIS RENEW BLUE
of market served by competitors with less than 4% share
FY12
*Excludes connections, services, digital content. Includes retailers‟ share of mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, internal analysis
10
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS BEEN GAINING SHARE IN KEY CATEGORIES BEST BUY REVENUE SHARE BY CATEGORY (percent)
30
Home Theater
25
Desktop/Notebook
20
+270
+1800
bps
bps
Tablets/eReaders
15 10
Major Appliances
5 0
Smartphones FY10
FY11
+100 bps
FY12
SOURCE: NPD, Stevenson Traqline, internal analysis
11
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS A LARGE AND LOYAL CUSTOMER BASE
TOP ESTIMATED RETAIL LOYALTY PROGRAMS IN 2012 (in million)
40
Sears Toys „R‟ Us
75
#1 loyalty program
Dick‟s Sporting Goods
Hallmark Starbucks Amazon Prime
Active
Inactive
SOURCE: Reward Zone, Colloquy, Bloomberg, Best Buy estimates
12
BEST BUY OFFERS A UNIQUE CUSTOMER PROMISE THE LATEST DEVICES AND SERVICES, ALL IN ONE PLACE
IMPARTIAL & KNOWLEDGEABLE ADVICE
COMPETITIVE PRICES
THE ABILITY TO SHOP WHEN AND WHERE YOU WANT
FOR THE LIFE OF YOUR PRODUCTS 13
BEST BUY HAS A PROMISING MULTI-CHANNEL PLATFORM U.S. DIGITAL CHANNEL IN FY12
Traffic: 1 Billion
INTRODUCTION DIAGNOSIS RENEW BLUE
70%
of customers do research on bestbuy.com before buying in our stores
40%
of bestbuy.com orders are picked up in stores
15%
of pick-up orders result in additional purchase
Revenue: $2.3 Billion
U.S. PHYSICAL STORES IN FY12
Traffic: 600 Million Revenue: $35 Billion
14
INTRODUCTION DIAGNOSIS RENEW BLUE
KEY OPERATING METRICS HISTORICALLY AMONG HIGHEST IN INDUSTRY REVENUE PER SQUARE FOOT
OPERATING INCOME PER SQUARE FOOT
(trailing four quarters)
(trailing four quarters)
$36
$1,140
Costco $852 Walmart
$444
Costco Home Depot
Home Depot
$305
Walmart
Target
$303
Target
Lowe's
$258
$32
Lowe's
SOURCE: Most recent four quarter revenue and operating income per Thomson First Call. Peer square footage per Bloomberg.
$31 $26 $22
$19
15
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S PERFORMANCE
HAS UNSATISFACTORY BEEN 16
BEST BUY HAS BEEN SLOW TO RESPOND TO CHANNEL AND CATEGORY SHIFTS
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY U.S. MARKET SHARE
17.0%
FY10
15.5% (30 bps)
(50 bps)
(70 bps)
Channel Mix
Product Mix
Share Loss
FY12
SOURCE: NPD, Stevenson Traqline, Nielsen and internal analysis
17
ONLINE IS INCREASING ITS SHARE OF THE MARKET INDUSTRY TOTALS*
$160
$151
$159
INTRODUCTION DIAGNOSIS RENEW BLUE
$160 Physica l Stores (1.5%)
SHARE ($ billion)
Online +7.7%
ONLINE % SHARE
15%
16%
17%
19%
*Excludes connections, services, digital content. Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, internal analysis
18
BEST BUY HAS BEEN SLOW TO CAPTURE THE ONLINE OPPORTUNITY
Excludes connections, services, digital content. Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
19
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S CUSTOMER SATISFACTION HAS IMPROVEMENT OPPORTUNITIES CUSTOMER SATISFACTION RATINGS 100
In-Store Retail Purchaser Purchaser Online Dotcom Purchaser Online DotcomShopper Shopper Non-Buyer Retail Shopper In-Store Shopper Non-Buyer Non-Buyer
90 80 70 60 50 40 Oct 11
Jan 12
Apr 12
July 12
Oct 12
SOURCE: Internal survey data. n=80,000 (monthly average)
20
INTRODUCTION DIAGNOSIS RENEW BLUE
AND WHILE BEST BUY LEADS THE COMPETITION ON MOST KEY ATTRIBUTES... 0%
100%
OFFERS THE LATEST PRODUCTS AND SERVICES IN ONE PLACE
PROVIDES EXPERT, UNBIASED ADVICE HAS SIMPLE STRAIGHTFORWARD PRICING Best Buy
HAS CONVENIENT SHOPPING OPTIONS
Competitor 1 Competitor 2 Competitor 3
PROVIDES THE I NEED EVERY STEP OF THE WAY SOURCE: Marketing Evolution Brand Tracker, July 2012. n=2,700 for Best Buy and minimum of 500 per competitor brand.
21
INTRODUCTION DIAGNOSIS RENEW BLUE
...BEST BUY NEEDS TO RAISE THE BAR IN ITS RELATIONSHIP WITH CUSTOMERS 0%
100%
ALWAYS DELIVER ON WHAT THEY PROMISE Best Buy
I KNOW WHAT THEY STAND FOR AND WHAT MAKES THEM DIFFERENT
Competitor 1 Competitor 2
SETS THE STANDARD FOR OTHER BRANDS TO FOLLOW THERE IS NO OTHER BRAND QUITE LIKE THEM
Competitor 3 Competitor 4 Competitor 5
PEOPLE RAVE ABOUT HOW GREAT THE BRAND IS
Competitor 6
SOURCE: Marketing Evolution Brand Tracker, July 2012. n=300 per brand.
22
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS A PRICE PERCEPTION ISSUE
Walmart Amazon Target
Apple Lower than others
43% About the same
Higher than others
No answer
SOURCE: Marketing Evolution Brand Tracker, n=2,804 FY13 Q2 Data
23
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S OVERALL RETURN ON INVESTED CAPITAL (ROIC) IS UNSATISFACTORY 35%
Costco Walmart
25% 20%
Home Depot
10%
Amazon
Target 0% -4 years
-3 years
-2 years
-1 year years
Most Recent Fiscal Year
SOURCE: Peer financials per Thomson Reuters Checkpoint. Peer ROIC calculated using Best Buy‟s methodology as disclosed in the supplemental non-GAAP reconciliation available at www.investors.bestbuy.com.
24
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S ROIC DECLINE DRIVEN BY DECREASING MARGINS AND INCREASING CAPITAL BEST BUY ROIC
4.2%
3.6%
3.6%
3.6%
3.4%
3.3%
NOPAT (% of sales)
16.8% 11.1% 11.2% 11.1% 10.9% 11.1% FY08
FY08
FY09
FY10
FY11
FY12
FY13 trailing 4Q*
$10.0
FY08
FY09
FY10
FY11
FY12
$14.7
$16.1
$16.3
$15.9
FY13 trailing 4Q* $15.0
Invested Capital FY09
FY10
FY11
FY12
FY13 trailing 4Q*
($ billion)
*Ending in Q2 FY13
25
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS TWO MAIN PROBLEMS TO SOLVE DECLINING COMPS 1.9%
DECLINING OPERATING MARGIN 5.9%
1.7%
U.S. COMPS
5.4% 5.6% 5.6%
U.S. OPERATING MARGIN (1.3%)
FY08
FY09
(1.7%) FY10
FY11
(2.1%) FY12
4.8% 4.7%
(1.6%) FY13 trailing 4Q*
FY08
FY09
FY10
FY11 FY12 FY13
trailing 4Q*
*Ending in Q2 FY13
26
RENEW
BLUE 27
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
28
INTRODUCTION DIAGNOSIS RENEW BLUE
REINVIGORATE THE ONLINE SHOPPING EXPERIENCE
1 billion
1.3% FY12 Conversion
TOP REASONS FOR NOT PURCHASING
9%
90%
FY12 Traffic
IMPACT
Need more product info
2%
Product was unavailable
1%
Price too high
1%
Need to see in person
1%
OPPORTUNITIES:
• Improve consumer electronics shopping tools / product content / recommendations • Expand assortment • Be price competitive • Diversify fulfillment • Improve check-out flow
Nor available for store pickup 1% Shipping will take too long
Total Digital Traffic
Purchased
Didn‟t Purchase But Wanted To
1%
Other
One point of conversion rate improvement equals:
$250 MILLION INCREMENTAL OPERATING INCOME
29
INTRODUCTION DIAGNOSIS RENEW BLUE
DEVELOP A WINNING ONLINE STRATEGY 1
Incent and reinforce desired behaviors using the currency of our rewards system
Optimize shopping and commerce flows to simplify, streamline, and reduce abandonment
5
Enhance the experience with ubiquitous availability on any device at any time
2
Build a world-class ecommerce platform
MULTI-CHANNEL EXPERIENCE
4
3
Enable Web 3.0 personalization
30
INTRODUCTION DIAGNOSIS RENEW BLUE
REINVIGORATE THE IN-STORE SHOPPING EXPERIENCE
600
TOP REASONS FOR NOT PURCHASING
40%
IMPACT
Need more product info
4%
Price too high
4%
Poor selection
3%
Conduct additional research
2%
Bad experience with employee
2%
million FY12 Traffic
19% 41%
Total Store Traffic
Purchased
Didn‟t Purchase But Wanted To
Other
OPPORTUNITIES: • • • • •
Enhance in-stock performance Implement holiday price match Develop multi-channel sales Enhance in-store pickup Train and incent Blue Shirts
One point of close rate improvement equals:
$200 MILLION INCREMENTAL OPERATING INCOME 31
TURN THE TABLES ON SHOWROOMING: PRICE MATCH
INTRODUCTION DIAGNOSIS RENEW BLUE
32
REDEG THE
SHOPPING EXPERIENC
E 33
INTRODUCTION DIAGNOSIS RENEW BLUE
EARLY RESULTS FROM RICHFIELD PROTOTYPE AUGUST AND SEPTEMBER RESULTS
*Adjusted to exclude estimated impact from the closure of a nearby store in June 2012
NOTE: “BEFORE” is FY12 and “AFTER” is FY13, except ROIC. **”BEFORE” ROIC based on trailing 12 months ending May, 2012. “AFTER” ROIC is the projected FY16 rate.
34
EMBRACE SHOWROOMING: BEST BUY BRANDS
INTRODUCTION DIAGNOSIS RENEW BLUE
35
EMBRACE SHOWROOMING: VENDOR SHOWROOMS
INTRODUCTION DIAGNOSIS RENEW BLUE
36
EMBRACE SHOWROOMING: REDLASER PARTNERSHIP
INTRODUCTION DIAGNOSIS RENEW BLUE
• In partnership with eBay and PayPal • One-click check out for Best Buy products • Geo-fencing capability offering deals when in Best Buy store
37
DEPLOY A BROAD SET OF SOLUTIONS AND SERVICES PURCHASE
• • •
Consultation Financing Leasing
ACTIVATE
• • •
Delivery Installation Activation
USE
• • •
Problem resolution Classes Calibration
PROTECT
• • •
Warranty Security services Protection
REPLACE
• • • •
Data transfer Trade-in Recycle Upgrade services
INTRODUCTION DIAGNOSIS RENEW BLUE
38
GROW COMPARABLE SALES THROUGH RETAIL EXCELLENCE COMP PERFORMANCE VS. MEDIAN 5% Stores with highest employee engagement
Stores with lowest employee engagement (2%)
INTRODUCTION DIAGNOSIS RENEW BLUE
ACTIONS: • Establish robust, objective store assessment process • Tighten ability • Implement rigorous training and coaching • Introduction of team-based incentives for all sales employees
200 basis points of incremental comp equals:
$150 MILLION INCREMENTAL OPERATING INCOME 39
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPROVE SCHEDULING TO DRIVE INCREASED REVENUE CLOSE RATE BY DAY OF WEEK
Raising Saturday/Sunday to reduce gap vs. weekday levels by half equals:
45%
40%
CLOSE RATE
$150 MILLION
35%
INCREMENTAL OPERATING INCOME
30% Monday
Tuesday
Wednesday Thursday
Friday
Saturday
Sunday
40
ENHANCE STORE MARGIN THROUGH SPACE OPTIMIZATION
INTRODUCTION DIAGNOSIS RENEW BLUE
OPPORTUNITIES: • Increase space allocated to growing/more profitable categories • Reduce or restructure space allocated to other categories, e.g., entertainment
Store restructuring could lead to:
$200 MILLION INCREMENTAL OPERATING INCOME
Sketch of Best Buy space allocation, created by Hubert Joly
41
INTRODUCTION DIAGNOSIS RENEW BLUE
OPTIMIZE COST STRUCTURE U.S./Canada/Mexico FY12 Actuals ($ billion) $8.5
$40.8
Selling, General & istrative
Total Costs
$32.3
Cost of Goods Sold
42
INTRODUCTION DIAGNOSIS RENEW BLUE
OPTIMIZE COST OF GOODS SOLD U.S./Canada/Mexico FY12 Actuals ($ billion)
$8.5
$40.8
$32.3
OPPORTUNITIES: • • • •
Optimize returns Increase private label penetration Improve logistics Optimize assortment and
Impact of 1% reduction in cost of goods sold:
$325 million Cost of Goods Sold
Selling, General & istrative
Total Costs
INCREMENTAL OPERATING INCOME
43
REDUCE SELLING, GENERAL & ISTRATIVE U.S./Canada/Mexico FY12 Actuals ($ billion)
$8.5
$40.8
$32.3
INTRODUCTION DIAGNOSIS RENEW BLUE
OPPORTUNITIES: • Streamline organization • Eliminate non-strategic activities • Improve efficiencies • Manage demand • Optimize IT spend • Consolidate and competitively bid spend
Impact of 5% reduction in SG&A: Cost of Goods Sold
Selling, General & istrative
Total Costs
$400 million INCREMENTAL OPERATING INCOME
44
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPLEMENT REAL ESTATE RATIONALIZATION STRATEGY:
1. ADDRESS LOWER PERFORMING STORES FOUR-WALL ROIC FOR U.S. LARGE FORMAT STORES 10% < 0% 0% - 10% 20% + TOTAL 20%
YEARS UNTIL LEASE END
6+ years
3
21
60
213
297
4 - 6 years
1
11
51
200
263
2 - 4 years
0
3
31
246
280
0 - 2 years
0
2
13
177
192
TOTAL
4
37
155
836
1,032
64 STORES
71%
45
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPLEMENT REAL ESTATE RATIONALIZATION STRATEGY:
2. RATIONALIZE FOOTPRINT AT MARKET LEVEL TWIN CITIES EXAMPLE (excludes impact of remodels) FY12
FY16E
CHANGE
# of Large Format Stores
24
20
(4)
# of Best Buy Mobile Stores
4
13
+9
Revenue per Sq. Ft.
$730
$875
+20%
Operating Income per Sq. Ft.
$75
$90
+20%
ROIC
26%
29%
+300 bps
46
SUMMARY OF OPERATIONAL IMPROVEMENT OPPORTUNITIES RETAIL EXECUTION ($ million)
OPERATING
Close Rates
$450
Store Performance
$300
Space Redesign
$200
Brands
TBD
Services
TBD
Cost of Goods Sold (including Supply Chain)
$325
Selling, General & istrative
$400
INTRODUCTION DIAGNOSIS RENEW BLUE
INCOME COST ($ million)
47
THROUGH RENEW BLUE, BEST BUY EXPECTS TO INCREASE OPERATING INCOME AND ROIC OPERATING MARGIN
INTRODUCTION DIAGNOSIS RENEW BLUE
ROIC
5-6%
13-15%
11.1% 4.2%
FY13 trailing 4Q*
FY 20XX
FY13 trailing 4Q*
FY 20XX
*Ending in Q2 FY13
48
INTRODUCTION DIAGNOSIS RENEW BLUE
TARGETS ARE IN LINE WITH THE AVERAGE OF OTHER RETAILERS OPERATING MARGIN Home Depot
10.1%
Target
7.4%
Lowe's
6.4%
Walmart
5.9%
Best Buy Renew Blue
5-6%
Best Buy
4.2%
Costco Amazon
ROIC
2.8% 1.2%
Costco
15.8%
Home Depot
14.8%
Walmart
14.4%
Best Buy Renew Blue
13-15%
Best Buy
11.1%
Target
10.2%
Lowe's
Amazon
8.3% 5.9%
SOURCE: Peer financials per Thomson Reuters Checkpoint. Peer ROIC calculated using Best Buy‟s methodology as disclosed in the supplemental non-GAAP reconciliation available at www.investors.bestbuy.com. Data reflects most recent four quarters.
49
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
50
INTRODUCTION DIAGNOSIS RENEW BLUE
WE HAVE TWO PROBLEMS TO SOLVE
PROBLEM #1
DRIVEN BY
SOLUTIONS
NEGATIVE
• • • •
• Reinvigorate and rejuvenate customer experience • Online • In-store • Multi-channel • Price match • Retail execution
COMPS
Channel shift Product mix shift Customer satisfaction Price perception
51
INTRODUCTION DIAGNOSIS RENEW BLUE
WE HAVE TWO PROBLEMS TO SOLVE
PROBLEM #2
DRIVEN BY
SOLUTIONS
DECLINING
• • •
• Reinvigorate and rejuvenate customer experience • Brand identity • Differentiation • brands • Services/hip • Work with vendor partners to innovate and drive value • Increase efficiency/take costs out
MARGINS
•
Declining comps Price competition Inability to get fully compensated for value Rising costs
52
INVESTMENT THESIS
INTRODUCTION DIAGNOSIS RENEW BLUE
1
Market leader in growing, fragmented market
2
Unique platform to deliver a multi-channel shopping and customer experience
3
Significant operational opportunities to enhance returns through improved execution and cost reduction opportunities
4
Opportunity to rejuvenate the customer experience and the company as the preferred authority and destination for technology products and services
5
Ability to stabilize and then improve comps and operating margin, with strong cash flow generation
6
Results-focused management team committed to delivering improved performance 53
RENEW
BLUE 54
THANK
YOU 55
BLUE
Best Buy Analyst and Investor Day November 13, 2012
FORWARD-LOOKING AND CAUTIONARY STATEMENTS: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management‟s current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “guidance,” “plan,” “outlook,” “opportunities,” and other words and of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forwardlooking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forwardlooking statements are the following: general economic conditions, changes in consumer preferences, credit market constraints, acquisitions and development of new businesses, divestitures, product availability, sales volumes, pricing actions and promotional activities of competitors, profit margins, weather, natural or man-made disasters, changes in law or regulations, foreign currency fluctuation, availability of suitable real estate locations, the company‟s ability to react to a disaster recovery situation, the impact of labor markets and new product introductions on overall profitability, failure to achieve anticipated benefits of announced transactions, integration challenges relating to new ventures and unanticipated costs associated with previously announced or future restructuring activities. A further list and description of these risks, uncertainties and other matters can be found in the company‟s annual report and other reports filed from time to time with the Securities and Exchange Commission, including, but not limited to, Best Buy‟s Annual Report on Form 10-K filed with the SEC on May 1, 2012. Best Buy cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made, and Best Buy assumes no obligation to update any forward-looking statement that it may make.
2
PRESENTATION OF FINANCIAL INFORMATION: The financial information included in this presentation is based on our old fiscal calendar for FY08 – FY10 and our new fiscal calendar for FY11 – FY13. Except for amounts used in the calculation of Return on Invested Capital (“ROIC”), all information is presented on a continuing operations basis. In addition, the financial information is presented on a non-GAAP basis. Such non-GAAP financial information should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial information reported in our 10-K, 10-Q and 8-K filings. For GAAP to non-GAAP reconciliations, please refer to the supplemental non-GAAP reconciliation schedule available on our website at www.investors.bestbuy.com.
3
AGENDA I. INTRODUCTION II. DIAGNOSIS III. RENEW BLUE
4
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
5
AGENDA I. INTRODUCTION II. DIAGNOSIS III. RENEW BLUE
6
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS
GREAT STRENGTHS
7
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY OPERATES IN A LARGE AND GROWING MARKET
U.S. CONSUMER ELECTRONICS AND APPLIANCES MARKET ($ billion)
CAGR +3.2%
FY09
FY10
FY11
FY12
Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater, digital imaging, connections, services and digital content. SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
8
MARKET GROWTH CONTINUES TO BE DRIVEN BY INNOVATION
INTRODUCTION DIAGNOSIS RENEW BLUE
U.S. RETAIL SALES BY CATEGORY Smartphones Tablets
Digital TVs
Notebooks Desktops
SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
9
BEST BUY IS THE OVERALL CATEGORY LEADER IN A HIGHLY-FRAGMENTED MARKET
48%
U.S. CONSUMER ELECTRONICS AND APPLIANCES EVOLUTION*
50%
2% 5%
49%
48%
1% Circuit 2% 5% City 6% 5%
4% 4% 5% 14% 15%
FY09
48%
Other
7%
8%
Amazon Target Sears Apple
15%
16%
15%
Walmart
17%
16%
16%
4%
3% 5%
FY10
5%
6%
FY11
5%
INTRODUCTION DIAGNOSIS RENEW BLUE
of market served by competitors with less than 4% share
FY12
*Excludes connections, services, digital content. Includes retailers‟ share of mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, internal analysis
10
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS BEEN GAINING SHARE IN KEY CATEGORIES BEST BUY REVENUE SHARE BY CATEGORY (percent)
30
Home Theater
25
Desktop/Notebook
20
+270
+1800
bps
bps
Tablets/eReaders
15 10
Major Appliances
5 0
Smartphones FY10
FY11
+100 bps
FY12
SOURCE: NPD, Stevenson Traqline, internal analysis
11
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS A LARGE AND LOYAL CUSTOMER BASE
TOP ESTIMATED RETAIL LOYALTY PROGRAMS IN 2012 (in million)
40
Sears Toys „R‟ Us
75
#1 loyalty program
Dick‟s Sporting Goods
Hallmark Starbucks Amazon Prime
Active
Inactive
SOURCE: Reward Zone, Colloquy, Bloomberg, Best Buy estimates
12
BEST BUY OFFERS A UNIQUE CUSTOMER PROMISE THE LATEST DEVICES AND SERVICES, ALL IN ONE PLACE
IMPARTIAL & KNOWLEDGEABLE ADVICE
COMPETITIVE PRICES
THE ABILITY TO SHOP WHEN AND WHERE YOU WANT
FOR THE LIFE OF YOUR PRODUCTS 13
BEST BUY HAS A PROMISING MULTI-CHANNEL PLATFORM U.S. DIGITAL CHANNEL IN FY12
Traffic: 1 Billion
INTRODUCTION DIAGNOSIS RENEW BLUE
70%
of customers do research on bestbuy.com before buying in our stores
40%
of bestbuy.com orders are picked up in stores
15%
of pick-up orders result in additional purchase
Revenue: $2.3 Billion
U.S. PHYSICAL STORES IN FY12
Traffic: 600 Million Revenue: $35 Billion
14
INTRODUCTION DIAGNOSIS RENEW BLUE
KEY OPERATING METRICS HISTORICALLY AMONG HIGHEST IN INDUSTRY REVENUE PER SQUARE FOOT
OPERATING INCOME PER SQUARE FOOT
(trailing four quarters)
(trailing four quarters)
$36
$1,140
Costco $852 Walmart
$444
Costco Home Depot
Home Depot
$305
Walmart
Target
$303
Target
Lowe's
$258
$32
Lowe's
SOURCE: Most recent four quarter revenue and operating income per Thomson First Call. Peer square footage per Bloomberg.
$31 $26 $22
$19
15
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S PERFORMANCE
HAS UNSATISFACTORY BEEN 16
BEST BUY HAS BEEN SLOW TO RESPOND TO CHANNEL AND CATEGORY SHIFTS
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY U.S. MARKET SHARE
17.0%
FY10
15.5% (30 bps)
(50 bps)
(70 bps)
Channel Mix
Product Mix
Share Loss
FY12
SOURCE: NPD, Stevenson Traqline, Nielsen and internal analysis
17
ONLINE IS INCREASING ITS SHARE OF THE MARKET INDUSTRY TOTALS*
$160
$151
$159
INTRODUCTION DIAGNOSIS RENEW BLUE
$160 Physica l Stores (1.5%)
SHARE ($ billion)
Online +7.7%
ONLINE % SHARE
15%
16%
17%
19%
*Excludes connections, services, digital content. Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, internal analysis
18
BEST BUY HAS BEEN SLOW TO CAPTURE THE ONLINE OPPORTUNITY
Excludes connections, services, digital content. Includes mobile phones, tablets, eReaders, appliances, physical music/movies, gaming, notebooks/desktops, home theater and digital imaging. SOURCE: NPD, Nielsen, Stevenson Traqline, Forrester, CEA, internal analysis
19
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S CUSTOMER SATISFACTION HAS IMPROVEMENT OPPORTUNITIES CUSTOMER SATISFACTION RATINGS 100
In-Store Retail Purchaser Purchaser Online Dotcom Purchaser Online DotcomShopper Shopper Non-Buyer Retail Shopper In-Store Shopper Non-Buyer Non-Buyer
90 80 70 60 50 40 Oct 11
Jan 12
Apr 12
July 12
Oct 12
SOURCE: Internal survey data. n=80,000 (monthly average)
20
INTRODUCTION DIAGNOSIS RENEW BLUE
AND WHILE BEST BUY LEADS THE COMPETITION ON MOST KEY ATTRIBUTES... 0%
100%
OFFERS THE LATEST PRODUCTS AND SERVICES IN ONE PLACE
PROVIDES EXPERT, UNBIASED ADVICE HAS SIMPLE STRAIGHTFORWARD PRICING Best Buy
HAS CONVENIENT SHOPPING OPTIONS
Competitor 1 Competitor 2 Competitor 3
PROVIDES THE I NEED EVERY STEP OF THE WAY SOURCE: Marketing Evolution Brand Tracker, July 2012. n=2,700 for Best Buy and minimum of 500 per competitor brand.
21
INTRODUCTION DIAGNOSIS RENEW BLUE
...BEST BUY NEEDS TO RAISE THE BAR IN ITS RELATIONSHIP WITH CUSTOMERS 0%
100%
ALWAYS DELIVER ON WHAT THEY PROMISE Best Buy
I KNOW WHAT THEY STAND FOR AND WHAT MAKES THEM DIFFERENT
Competitor 1 Competitor 2
SETS THE STANDARD FOR OTHER BRANDS TO FOLLOW THERE IS NO OTHER BRAND QUITE LIKE THEM
Competitor 3 Competitor 4 Competitor 5
PEOPLE RAVE ABOUT HOW GREAT THE BRAND IS
Competitor 6
SOURCE: Marketing Evolution Brand Tracker, July 2012. n=300 per brand.
22
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS A PRICE PERCEPTION ISSUE
Walmart Amazon Target
Apple Lower than others
43% About the same
Higher than others
No answer
SOURCE: Marketing Evolution Brand Tracker, n=2,804 FY13 Q2 Data
23
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S OVERALL RETURN ON INVESTED CAPITAL (ROIC) IS UNSATISFACTORY 35%
Costco Walmart
25% 20%
Home Depot
10%
Amazon
Target 0% -4 years
-3 years
-2 years
-1 year years
Most Recent Fiscal Year
SOURCE: Peer financials per Thomson Reuters Checkpoint. Peer ROIC calculated using Best Buy‟s methodology as disclosed in the supplemental non-GAAP reconciliation available at www.investors.bestbuy.com.
24
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY‟S ROIC DECLINE DRIVEN BY DECREASING MARGINS AND INCREASING CAPITAL BEST BUY ROIC
4.2%
3.6%
3.6%
3.6%
3.4%
3.3%
NOPAT (% of sales)
16.8% 11.1% 11.2% 11.1% 10.9% 11.1% FY08
FY08
FY09
FY10
FY11
FY12
FY13 trailing 4Q*
$10.0
FY08
FY09
FY10
FY11
FY12
$14.7
$16.1
$16.3
$15.9
FY13 trailing 4Q* $15.0
Invested Capital FY09
FY10
FY11
FY12
FY13 trailing 4Q*
($ billion)
*Ending in Q2 FY13
25
INTRODUCTION DIAGNOSIS RENEW BLUE
BEST BUY HAS TWO MAIN PROBLEMS TO SOLVE DECLINING COMPS 1.9%
DECLINING OPERATING MARGIN 5.9%
1.7%
U.S. COMPS
5.4% 5.6% 5.6%
U.S. OPERATING MARGIN (1.3%)
FY08
FY09
(1.7%) FY10
FY11
(2.1%) FY12
4.8% 4.7%
(1.6%) FY13 trailing 4Q*
FY08
FY09
FY10
FY11 FY12 FY13
trailing 4Q*
*Ending in Q2 FY13
26
RENEW
BLUE 27
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
28
INTRODUCTION DIAGNOSIS RENEW BLUE
REINVIGORATE THE ONLINE SHOPPING EXPERIENCE
1 billion
1.3% FY12 Conversion
TOP REASONS FOR NOT PURCHASING
9%
90%
FY12 Traffic
IMPACT
Need more product info
2%
Product was unavailable
1%
Price too high
1%
Need to see in person
1%
OPPORTUNITIES:
• Improve consumer electronics shopping tools / product content / recommendations • Expand assortment • Be price competitive • Diversify fulfillment • Improve check-out flow
Nor available for store pickup 1% Shipping will take too long
Total Digital Traffic
Purchased
Didn‟t Purchase But Wanted To
1%
Other
One point of conversion rate improvement equals:
$250 MILLION INCREMENTAL OPERATING INCOME
29
INTRODUCTION DIAGNOSIS RENEW BLUE
DEVELOP A WINNING ONLINE STRATEGY 1
Incent and reinforce desired behaviors using the currency of our rewards system
Optimize shopping and commerce flows to simplify, streamline, and reduce abandonment
5
Enhance the experience with ubiquitous availability on any device at any time
2
Build a world-class ecommerce platform
MULTI-CHANNEL EXPERIENCE
4
3
Enable Web 3.0 personalization
30
INTRODUCTION DIAGNOSIS RENEW BLUE
REINVIGORATE THE IN-STORE SHOPPING EXPERIENCE
600
TOP REASONS FOR NOT PURCHASING
40%
IMPACT
Need more product info
4%
Price too high
4%
Poor selection
3%
Conduct additional research
2%
Bad experience with employee
2%
million FY12 Traffic
19% 41%
Total Store Traffic
Purchased
Didn‟t Purchase But Wanted To
Other
OPPORTUNITIES: • • • • •
Enhance in-stock performance Implement holiday price match Develop multi-channel sales Enhance in-store pickup Train and incent Blue Shirts
One point of close rate improvement equals:
$200 MILLION INCREMENTAL OPERATING INCOME 31
TURN THE TABLES ON SHOWROOMING: PRICE MATCH
INTRODUCTION DIAGNOSIS RENEW BLUE
32
REDEG THE
SHOPPING EXPERIENC
E 33
INTRODUCTION DIAGNOSIS RENEW BLUE
EARLY RESULTS FROM RICHFIELD PROTOTYPE AUGUST AND SEPTEMBER RESULTS
*Adjusted to exclude estimated impact from the closure of a nearby store in June 2012
NOTE: “BEFORE” is FY12 and “AFTER” is FY13, except ROIC. **”BEFORE” ROIC based on trailing 12 months ending May, 2012. “AFTER” ROIC is the projected FY16 rate.
34
EMBRACE SHOWROOMING: BEST BUY BRANDS
INTRODUCTION DIAGNOSIS RENEW BLUE
35
EMBRACE SHOWROOMING: VENDOR SHOWROOMS
INTRODUCTION DIAGNOSIS RENEW BLUE
36
EMBRACE SHOWROOMING: REDLASER PARTNERSHIP
INTRODUCTION DIAGNOSIS RENEW BLUE
• In partnership with eBay and PayPal • One-click check out for Best Buy products • Geo-fencing capability offering deals when in Best Buy store
37
DEPLOY A BROAD SET OF SOLUTIONS AND SERVICES PURCHASE
• • •
Consultation Financing Leasing
ACTIVATE
• • •
Delivery Installation Activation
USE
• • •
Problem resolution Classes Calibration
PROTECT
• • •
Warranty Security services Protection
REPLACE
• • • •
Data transfer Trade-in Recycle Upgrade services
INTRODUCTION DIAGNOSIS RENEW BLUE
38
GROW COMPARABLE SALES THROUGH RETAIL EXCELLENCE COMP PERFORMANCE VS. MEDIAN 5% Stores with highest employee engagement
Stores with lowest employee engagement (2%)
INTRODUCTION DIAGNOSIS RENEW BLUE
ACTIONS: • Establish robust, objective store assessment process • Tighten ability • Implement rigorous training and coaching • Introduction of team-based incentives for all sales employees
200 basis points of incremental comp equals:
$150 MILLION INCREMENTAL OPERATING INCOME 39
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPROVE SCHEDULING TO DRIVE INCREASED REVENUE CLOSE RATE BY DAY OF WEEK
Raising Saturday/Sunday to reduce gap vs. weekday levels by half equals:
45%
40%
CLOSE RATE
$150 MILLION
35%
INCREMENTAL OPERATING INCOME
30% Monday
Tuesday
Wednesday Thursday
Friday
Saturday
Sunday
40
ENHANCE STORE MARGIN THROUGH SPACE OPTIMIZATION
INTRODUCTION DIAGNOSIS RENEW BLUE
OPPORTUNITIES: • Increase space allocated to growing/more profitable categories • Reduce or restructure space allocated to other categories, e.g., entertainment
Store restructuring could lead to:
$200 MILLION INCREMENTAL OPERATING INCOME
Sketch of Best Buy space allocation, created by Hubert Joly
41
INTRODUCTION DIAGNOSIS RENEW BLUE
OPTIMIZE COST STRUCTURE U.S./Canada/Mexico FY12 Actuals ($ billion) $8.5
$40.8
Selling, General & istrative
Total Costs
$32.3
Cost of Goods Sold
42
INTRODUCTION DIAGNOSIS RENEW BLUE
OPTIMIZE COST OF GOODS SOLD U.S./Canada/Mexico FY12 Actuals ($ billion)
$8.5
$40.8
$32.3
OPPORTUNITIES: • • • •
Optimize returns Increase private label penetration Improve logistics Optimize assortment and
Impact of 1% reduction in cost of goods sold:
$325 million Cost of Goods Sold
Selling, General & istrative
Total Costs
INCREMENTAL OPERATING INCOME
43
REDUCE SELLING, GENERAL & ISTRATIVE U.S./Canada/Mexico FY12 Actuals ($ billion)
$8.5
$40.8
$32.3
INTRODUCTION DIAGNOSIS RENEW BLUE
OPPORTUNITIES: • Streamline organization • Eliminate non-strategic activities • Improve efficiencies • Manage demand • Optimize IT spend • Consolidate and competitively bid spend
Impact of 5% reduction in SG&A: Cost of Goods Sold
Selling, General & istrative
Total Costs
$400 million INCREMENTAL OPERATING INCOME
44
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPLEMENT REAL ESTATE RATIONALIZATION STRATEGY:
1. ADDRESS LOWER PERFORMING STORES FOUR-WALL ROIC FOR U.S. LARGE FORMAT STORES 10% < 0% 0% - 10% 20% + TOTAL 20%
YEARS UNTIL LEASE END
6+ years
3
21
60
213
297
4 - 6 years
1
11
51
200
263
2 - 4 years
0
3
31
246
280
0 - 2 years
0
2
13
177
192
TOTAL
4
37
155
836
1,032
64 STORES
71%
45
INTRODUCTION DIAGNOSIS RENEW BLUE
IMPLEMENT REAL ESTATE RATIONALIZATION STRATEGY:
2. RATIONALIZE FOOTPRINT AT MARKET LEVEL TWIN CITIES EXAMPLE (excludes impact of remodels) FY12
FY16E
CHANGE
# of Large Format Stores
24
20
(4)
# of Best Buy Mobile Stores
4
13
+9
Revenue per Sq. Ft.
$730
$875
+20%
Operating Income per Sq. Ft.
$75
$90
+20%
ROIC
26%
29%
+300 bps
46
SUMMARY OF OPERATIONAL IMPROVEMENT OPPORTUNITIES RETAIL EXECUTION ($ million)
OPERATING
Close Rates
$450
Store Performance
$300
Space Redesign
$200
Brands
TBD
Services
TBD
Cost of Goods Sold (including Supply Chain)
$325
Selling, General & istrative
$400
INTRODUCTION DIAGNOSIS RENEW BLUE
INCOME COST ($ million)
47
THROUGH RENEW BLUE, BEST BUY EXPECTS TO INCREASE OPERATING INCOME AND ROIC OPERATING MARGIN
INTRODUCTION DIAGNOSIS RENEW BLUE
ROIC
5-6%
13-15%
11.1% 4.2%
FY13 trailing 4Q*
FY 20XX
FY13 trailing 4Q*
FY 20XX
*Ending in Q2 FY13
48
INTRODUCTION DIAGNOSIS RENEW BLUE
TARGETS ARE IN LINE WITH THE AVERAGE OF OTHER RETAILERS OPERATING MARGIN Home Depot
10.1%
Target
7.4%
Lowe's
6.4%
Walmart
5.9%
Best Buy Renew Blue
5-6%
Best Buy
4.2%
Costco Amazon
ROIC
2.8% 1.2%
Costco
15.8%
Home Depot
14.8%
Walmart
14.4%
Best Buy Renew Blue
13-15%
Best Buy
11.1%
Target
10.2%
Lowe's
Amazon
8.3% 5.9%
SOURCE: Peer financials per Thomson Reuters Checkpoint. Peer ROIC calculated using Best Buy‟s methodology as disclosed in the supplemental non-GAAP reconciliation available at www.investors.bestbuy.com. Data reflects most recent four quarters.
49
INTRODUCTION DIAGNOSIS RENEW BLUE
RENEW
BLUE
THE PREFERRED AUTHORITY AND DESTINATION FOR TECHNOLOGY PRODUCTS AND SERVICES
Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
Work with VENDOR PARTNERS to innovate and drive value
Attract and inspire LEADERS AND EMPLOYEES
Continue leadership role in positively impacting OUR WORLD
Increase ROIC for INVESTORS
50
INTRODUCTION DIAGNOSIS RENEW BLUE
WE HAVE TWO PROBLEMS TO SOLVE
PROBLEM #1
DRIVEN BY
SOLUTIONS
NEGATIVE
• • • •
• Reinvigorate and rejuvenate customer experience • Online • In-store • Multi-channel • Price match • Retail execution
COMPS
Channel shift Product mix shift Customer satisfaction Price perception
51
INTRODUCTION DIAGNOSIS RENEW BLUE
WE HAVE TWO PROBLEMS TO SOLVE
PROBLEM #2
DRIVEN BY
SOLUTIONS
DECLINING
• • •
• Reinvigorate and rejuvenate customer experience • Brand identity • Differentiation • brands • Services/hip • Work with vendor partners to innovate and drive value • Increase efficiency/take costs out
MARGINS
•
Declining comps Price competition Inability to get fully compensated for value Rising costs
52
INVESTMENT THESIS
INTRODUCTION DIAGNOSIS RENEW BLUE
1
Market leader in growing, fragmented market
2
Unique platform to deliver a multi-channel shopping and customer experience
3
Significant operational opportunities to enhance returns through improved execution and cost reduction opportunities
4
Opportunity to rejuvenate the customer experience and the company as the preferred authority and destination for technology products and services
5
Ability to stabilize and then improve comps and operating margin, with strong cash flow generation
6
Results-focused management team committed to delivering improved performance 53
RENEW
BLUE 54
THANK
YOU 55
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