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|Best Buy Announces Leadership Changes to U.S. Business; Company Will Hold an Analyst and Investor Meeting in New York City on November 1, 2012; Previews Expected Fiscal Third Quarter Earnings|
MINNEAPOLIS, October 24, 2012 - In a move to make Best Buy more responsive to business opportunities and challenges, the company announced today a new leadership organization for its U.S. operations. The senior-most layer of the U.S. operation is being removed; resulting in a leaner structure intended to improve the company's agility.
"One thing I have learned in helping turn companies around is that a business needs to have a nimble organization," said Best Buy President and CEO Hubert Joly. "Our new organization will help build a closer connection to our customers and front line employees, as well as accelerate our transformation."
Effective January 1, 2013, Best Buy's operations in the U.S. will be structured around the following groups:
In this phase of Best Buy's transformation, these groups will report directly to Joly. The current president of Best Buy's U.S. business, Mike Vitelli, will retire from the company at the end of the fiscal year. He will work closely with Joly to ensure a smooth transition. Executive Vice President of U.S. Operations Tim Sheehan will leave the company at the end of the month.
"Shawn Score and Jude Buckley have done a great job growing Best Buy Mobile and then leading the Connectivity Business Group. I look forward to working with them and the rest of our team as we re-invigorate and rejuvenate Best Buy," said Joly. "Mike Vitelli and I will work closely together during the next few months to ensure a smooth transition. I am very grateful to him for everything he has done for the company and for his terrific support."
"My time here has been incredibly rewarding and a true honor. The next few months will be devoted to winning this holiday season while working with the leadership team, our vendors and other partners to ensure an orderly transition," said Vitelli. "I will miss the men and women of Best Buy and retire from this great company certain that its best days are ahead."
The channel and business group changes announced today will be effective on January 1, 2013, as Best Buy focuses more immediately on the holiday selling season. In recent weeks, the company has emphasized a series of initiatives designed to attract more consumers to its e-commerce platforms and physical stores, including offering free shipping. Over the past several months the company has significantly increased its investment to train its sales force to better serve its customers. For the holiday season, Best Buy has also given its sales associates, known as Blue Shirts, the authority to match online prices in key categories.
Analyst and Investor Day on November 1, 2012
Best Buy will hold an Analyst and Investor Day on November 1, 2012 in New York City, with presentations beginning at 1:00 p.m. ET. The event will be hosted by Hubert Joly, Best Buy's President and CEO. Mr. Joly will share his assessment of the business and the areas of focus going forward. The event will also include presentations by other members of the executive team.
The presentations will be broadcast live via the internet and available on Best Buy's investor relations website (www.investors.bestbuy.com).
Fiscal Third Quarter 2013 Results Update
The company is providing an update on its expected results for the fiscal third quarter ending November 3, 2012. Comparable store sales are expected to decline at a rate consistent with the range of results for the first two quarters of fiscal 2013 (-5.3% in the first quarter and -3.2% in the second quarter). Gross profit rate is expected to decline at a rate similar to that experienced in the fiscal second quarter of 2013, with a decline of more than 100 basis points compared to the prior-year period, due to the impact of product mix and product transitions in advance of several key new product launches. The company expects SG&A expense percentage growth to be in the low single digits over the prior-year period, due to investments related to the company's strategic focus on improved customer service (including increased training and higher compensation costs for sales associates). As a result, the company expects fiscal third quarter adjusted (non-GAAP) earnings per diluted share will be significantly below the prior-year period.
The company plans to release fiscal third quarter 2013 results on Tuesday, November 20, 2012 at approximately 7:00 a.m. CT and is scheduled to conduct an earnings conference call at 8:00 a.m. CT (9:00 a.m. ET) on that same day.
Forward-Looking and Cautionary Statements:
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