UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 14, 2011
BEST BUY CO., INC.
(Exact name of registrant as specified in its charter)
Minnesota |
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1-9595 |
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41-0907483 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
7601 Penn Avenue South |
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Richfield, Minnesota |
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55423 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code (612) 291-1000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On April 14, 2011, Best Buy Co., Inc. (Best Buy or the registrant) posted a news release summarizing certain matters presented at its Investor and Analyst Day held on that date.
A webcast replay of the Investor and Analyst Day presentations and the accompanying slides will be available on the registrants Web site at www.bby.com select the Investor Relations link.
The news release posted on April 14, 2011, is filed as Exhibit No. 99 to this Current Report on Form 8-K. Best Buy Co., Inc.s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the registrant.
The attached news release also contains forward-looking statements relating to, among other things, Best Buys future performance that are based on Best Buys current expectations, forecasts and assumptions and involve risks and uncertainties. A more thorough discussion of certain factors that may affect Best Buys actual results is included under the captions Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in Best Buys most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting the companys investor relations web site at www.bby.com select the Investor Relations link or the SECs web site at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in the attached press release, which are based on information available to the company on the date hereof. Best Buy assumes no obligation to update such statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following is filed as an Exhibit to this Report.
Exhibit No. |
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Description of Exhibit |
99 |
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News release posted April 14, 2011. Any internet addresses provided in this release are for information purposes only and are not intended to be hyperlinks. Accordingly, no information in any of these internet addresses is included herein. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BEST BUY CO., INC. |
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(Registrant) |
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Date: April 15, 2011 |
By: |
/s/ SUSAN S. GRAFTON |
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Susan S. Grafton |
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Vice President, Controller and Chief Accounting Officer |
Exhibit 99
Media Contacts: |
Investor Contacts: |
Susan Busch, Senior Director, Public Relations |
Bill Seymour, Vice President, Investor Relations |
(612) 291-6114 or susan.busch@bestbuy.com |
(612) 291-6122 or bill.seymour@bestbuy.com |
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Lisa Hawks, Director, Public Relations |
Mollie OBrien, Director, Investor Relations |
(612) 291-6150 or lisa.hawks@bestbuy.com |
(612) 291-7735 or mollie.obrien@bestbuy.com |
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Adam Hauser, Director, Investor Relations |
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(612) 291-4446 or adam.hauser@bestbuy.com |
BEST BUY INVESTOR AND
ANALYST DAY HIGHLIGHTS
STRATEGY AND KEY INITIATIVES
· Growth further defined via multi-channel retail strategy, Best Buy Mobile and Five Star expansion
· Choice, connections, content, services key elements of strategy
· Best Buy well-positioned to deliver the Connected World for customers
MINNEAPOLIS April 14, 2011 At its 2011 Investor and Analyst Day, Best Buy Co., Inc. (NYSE) CEO Brian J. Dunn and senior executives provided an in-depth view of the companys strategies for generating growth and delivering shareholder value.
Technology is connecting the world, and we believe its changing the world for the better, said Dunn. We recognize that people need help in navigating our increasingly connected world. And Best Buy has an unparalleled range of ways we can assist online, through our stores, over the phone or in their homes. This multi-faceted approach allows us to serve customers whenever and wherever they want, which also positions us to improve returns and deliver value for shareholders.
The company reiterated its fiscal 2012 guidance as announced on March 24, 2011.
Strategic priorities focus on growth opportunities, operations, improved international returns
In introductory remarks, Dunn said Best Buys strategic priorities aim to capture new growth opportunities in key categories and channels; fund growth efforts through structural opportunities; and maximize international returns, allocating additional capital only to those businesses that generate demonstrable returns.
Dunn revealed a Best Buy portfolio strategy that will maximize the companys multi-channel, multi-category business, including a strategically diversified collection of physical properties that range from small Best Buy Express kiosks and Best Buy Mobile standalone locations, to Best Buy big box stores at 20,000-45,000 square feet. Dunn noted that Best Buy generates among the highest sales per square footage of any large format retailer in the U.S.
Outlining the companys performance in hardware, accessories, connections, content and services, Dunn reiterated that the majority of the companys margin is generated by supporting products and services that are desired by customers and sold in concert with a primary hardware purchase. The growing complexity of the consumer technology purchase decision makes a knowledgeable sales force essential, he said.
Dunn noted that the company began taking steps more than a year ago to re-engineer its business model, and continues to identify multiple ways to decrease costs in four key areas: store portfolio, total workforce, product acquisition and flow, and procurement. Savings in these areas are planned to be re-directed to investment in high-growth opportunities and fueling a more competitive price position.
Opportunities exist for growth online and in key low-share businesses
Shari Ballard, president, Americas and enterprise executive vice president, described efforts to drive returns in its U.S. stores through specific actions to improve store productivity while adding points of presence. She noted that overall U.S. traffic is growing, driven primarily by the companys web properties, and that 99 percent of U.S. current brick-and-mortar stores are profitable.
Ballard outlined efforts to strengthen pricing and assortment across channels to drive higher conversion and overall price impression for the brand. She reported that the company expects to double the $2 billion in revenue for Best Buys U.S. online business in three to five years. The company also noted that it is strongly advocating for e-fairness to address the unfair online pricing advantage.
Ballard also noted that the company anticipates a 10 percent reduction in U.S. big box store square footage over the next three to five years, resulting in expected annual savings of $70 million to $80 million, when fully realized.
Mike Vitelli, president, Americas and enterprise executive vice president, affirmed that Best Buy continues to hold industry leading market share in the television, computing and digital imaging categories, observing that an estimated one out of every three televisions sold in the U.S. is purchased through Best Buy channels. Vitelli also revealed the companys plans to pursue additional growth opportunities in four key consumer technology products: mobile phones, tablets, gaming and appliances. He noted that Best Buy plans to address each of these opportunities by capitalizing on its success in delivering store experiences that enable customers to touch, try, compare and walk out working.
Both Ballard and Vitelli noted the potential of the small format store as evidenced by the expansion of Best Buy Mobile standalone stores. The company expects to add 150 Best Buy Mobile stores in fiscal 2012 and believes that the company could have an estimated 600 to 800 stores within five years.
International: Significant runway for Chinas Five Star stores
Dave Deno, CFO of Best Buy International, reviewed the performance of Best Buys operations outside of the United States. Best Buys international strategy is focused on four key geographic areas (Canada, China, Europe and Mexico), where the company has sufficient size, scale and economics to succeed. Deno described the real estate growth strategy for Five Star, Best Buys brand in China, and said that Five Star intends to open between 400 and 500 stores in the next five years and that there is potential for Five Star to grow to 1,000 stores. Deno also reiterated that Five Stars gross profit rate expansion and SG&A growth are commensurate with growth plans.
Financial strength and discipline
According to Jim Muehlbauer, Best Buys executive vice president of finance and CFO, the company continues its disciplined and balanced capital allocation strategy underpinned by investing in areas that provide the greatest ROIC, driving free cash flow and returning cash back to shareholders Muehlbauer confirmed the current share repurchase activity and a goal of fully utilizing its existing share repurchase authorization of $1.3 billion in fiscal 2012, subject to market conditions and other factors.
A webcast replay of the Investor and Analyst Day presentations and the accompanying slides will be available at www.bby.com under Investor Relations. For further information, please see the Form 8-K filed this morning by the company and the accompanying news release available at www.bby.com under Investor Relations and at www.sec.gov.
Forward-Looking and Cautionary Statements:
This news release 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 managements 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, plan, outlook, and other words and terms 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 forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking 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, changes in law or regulations, foreign currency fluctuation, availability of suitable real estate locations, the companys 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 and integration challenges relating to new ventures. A further list and description of these risks, uncertainties and other matters can be found in the companys annual report and other reports filed from time to time with the Securities and Exchange Commission, including, but not limited to, Best Buys Annual Report on Form 10-K filed with the SEC on April 28, 2010. Best Buy cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statement that it may make.
About Best Buy Co., Inc.
With operations in the United States, Canada, Europe, China and Mexico, Best Buy is a multinational retailer of technology and entertainment products and services with a commitment to growth and innovation. The Best Buy family of brands and partnerships collectively generates more than $50 billion in annual revenue and includes brands such as Best Buy, Audiovisions, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales, and The Phone House. Approximately 180,000 employees apply their talents to help bring the benefits of these brands to life for customers through retail locations, multiple call centers and Web sites, in-home solutions, product delivery and activities in our communities. Community partnership is central to the way Best Buy does business. In fiscal 2011, the company donated approximately $25 million to improve the vitality of the communities where its employees and customers live and work. For more information about Best Buy, visit www.bby.com.
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