Earnings Preview: Best Buy 2Q
NEW YORK (AP) — Best Buy Co.'s second-quarter earnings report on Tuesday may give some insight into how Best Buy's efforts to turn around its business are faring. Analysts expect the company to report lower net income on higher revenue.
WHAT TO WATCH FOR: Best Buy has been facing tough competition from discounters and online retailers as people browse electronics in stores and then go home to buy them more cheaply online, a practice known as "showrooming."
To combat this, Best Buy has instituted a cost-cutting program, revamped some stores and closed others and invested in more employee training. In April, the company also said that it would sell its 50 percent stake in its European joint venture to streamline its business and strengthen its balance sheet.
The Minneapolis company is also becoming more aggressive with prices and working to improve its website. It is opening more store-within-a-store sections for manufacturers, including Microsoft, Apple, Samsung and Magnolia.
Analysts will be looking for an update from CEO Hubert Joly on how these turnaround plans are going.
WHY IT MATTERS: Best Buy is the largest U.S. specialty electronics store and how it does gives some indication of how Americans are spending on discretionary goods, or more broadly, how they feel about the economy.
WHAT'S EXPECTED: Analysts expect net income of 12 cents per share on revenue of $10.55 billion, according to FactSet.
LAST YEAR'S QUARTER: Best Buy reported earnings excluding one-time items of 20 cents per share on revenue of $16.08 billion.