Best Buy Co. Inc. will report fourth quarter and year-end earnings Thursday morning. But that will probably be the least interesting part of CEO Brian Dunn's presentation.

At least two analysts predict the struggling Richfield-based retailer will announce a more aggressive restructuring plan that might include store closings, relocating to smaller spaces, subletting existing store, and layoffs.

Best Buy had previously told investors that it wanted to reduce its U.S. square foot footprint by over 10 percent over the next three to five years. But Dave Strasser, an analyst with Janney Capital Markets, suspects the company will go even further.

"We anticipate a more aggressive approach than that as the environment changes," Strasser wrote. "This will improve profitability and margins. We have to believe that BBY management has seen the impact that this type of action had on the shares" of Loews and Home Depot.

UBS analyst Michael Lasser said a major plan could help better shape Best Buy's rather gloomy image of late.

"We think a bold step such as this would change the narrative on the story and the debate would turn to whether or not it can work,”  Lasser wrote.

Indeed, Best Buy stock seems to have already benefited from the reported restructuring redux. Since mid-March, Best Buy shares have jumped nearly 11 percent to Wednesday's close of $26.62.

Best Buy needs to find ways to preserve its profit margins after Dunn last year said the company would shift its focus to battling competitors like Amazon for market share. In order for Best Buy to effectively promote its digital efforts and sell higher margin services like Geek Squad, Dunn has concluded the retailer must first drive people to its stores.

Fighting for market share is usually code for lots of discounting and less profits. Therefore,  it seems logical that Best Buy will subsidize its price cuts with cost savings from store closings and layoffs.

I'm scheduled to speak to Dunn Thursday, another sign something's afoot. The company doesn't normally offer Dunn for interviews after routine earnings calls.

But this call seems anything but routine.

 

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