Goldman Sachs Gives Comments On Best Buy Following Analyst Day

Goldman found Best Buy's BBY management sober and aware of the firm's challenges, more so than discussion on recent conference calls would suggest. There is likely a place for BBY in the online world; 80% of TVs ordered on bestbuy.com are picked up in-store, and AMZN's TV share is a small fraction of BBY's. BBY realizes it needs to cut prices closer to Amazon AMZN, though with AMZN's dynamic pricing capability BBY will not likely establish a price edge. BBY has its act together in mobile, with some of the strongest systems and economics in the marketplace. Its take on the market is certainly far more sophisticated than that of RSH, its primary multi-carrier competitor. Similarly, BBY is ramping aggressively in videogames, building capacity in used sales, trade-ins, pre-ordering, and digital content. The China 5-Star business generates margins near BBY's US ones at 3.7%. Based on the most interesting chart BBY displayed, only about 25% of gross profit dollars came from hardware; more than double that coming from services. 8. BBY's store-size/design issues remain works-in-progress. The new “connected world” format and associated labor model illustrate connected solutions, but by BBY's own admission are not finished products. BBY closed Friday at $28.85