In May, the company announced a new program that would pick up and dispose of large electronics and major appliances…for a price. And while that same concern is being voiced by other big box retailers like Walmart, Target and Kohl’s, Best Buy’s results seem especially troubling.īarry has announced a number of new initiatives since taking over to try to slow down any declines. “We’re seeing some increased signals of concern,” is the way CEO Corie Barry (who succeeded Joly in June of 2019) put it to analysts in discussing the results. It’s predicting a 3 to 6 percent decline in comp sales, compared to its prior guidance of a 1 to 3 percent decline. What’s more, the retailer stated things are going to be worse than its earlier forecast for the balance of its current fiscal year. First quarter earnings in the meantime dropped to $341 million from $595 in 2021. That at least partially explains Best Buy’s dismal first quarter when same store sales declined 8 percent and overall revenue dropped about $1 billion from the previous year to $10.6 billion. It’s certainly not as easy to pull off as it may look on a spreadsheet. How many apparel retailers have expanded into home – and how many home stores have gone into apparel? Many of them found it’s not a fit when it comes to buying, in-store displays and when unaligned merchandise turns into markdown strategies. This moves away from the frenzy for goods that made the pandemic era such a goldmine for retailers selling products for home use. Many retailers are getting caught in the consumer’s shift over the past few months out of their homes and back into travel, vacations and other services.
Of course, operating in a better economic climate for purchases of big-ticket items – TVs, computers, major appliances – that are at the heart of what Best Buy sells wouldn’t hurt. At least one of them seems to directly contradict one of Joly’s core principles. Impacted by factors both within and outside of its control, the big consumer electronics retail chain has most recently reported disappointing results while introducing a number of new initiatives that may or may not be consistent with its core merchandising strategy. Ever since he left, it appears that the turnaround seems to be continuing…but the question is: Is it turning the opposite direction? Best Buy, under Hubert Joly’s run as CEO, defied the odds and became one of the great turnaround stories in recent retail history.
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