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Continued: CEO Hubert Joly's Best Buy has just begun to fight

  • Article by: DAVID PHELPS , Star Tribune
  • Last update: November 28, 2013 - 6:36 AM

“A year ago, the company was run very inefficiently. It wasn’t price competitive,” Yarbrough said in an interview. “They’ve stabilized the business. They closed underperforming stores. They’ve got $2 billion in cash. The question is, what is the long-term earnings power of this business?”

Best Buy stock closed Wednesday at $39.61. Although the stock took an 11 percent hit last week after third-quarter earnings were reported, it still is more than threefold above its low last December of $11.29.

“This is a war, not a battle,” was the title of a research report from Credit Suisse analyst Gary Balter last week.

“Is there more to go? Absolutely,” Balter said. “The top line is not there yet but the trend is moving in the right direction and management appears to be making the right moves to improve future results.”

Joly agreed: “We’re not saying this is over. We’re just warming up.”

In 2011, company executives, including then-CEO Brian Dunn, often used the term “economic headwinds” to describe Best Buy’s languishing fortunes.

In a not-so-veiled shot at such sentiments, Joly told analysts: “A year or two ago, the message from this company was all about the headwinds to explain the results. We never talk about the headwinds. We are focused on the levers we can control.”

 

David Phelps • 612-673-7269









 

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