Financial Analysis Project: Best Buy, Inc.
Part 1: Company Information
From Yahoo Finance--Profile--Expanded Business Description:
Competitors (Covered by S&P)
Incorporated in Minnesota in 1966 as Sound of Music, Inc., Best Buy Company is a
specialty retailer of consumer electronics, home-office products, entertainment software,
appliances and related services. The company operates retail stores and/or commercial
Web sites under the brand names Best Buy, Future Shop, Magnolia Audio Video, and
Geek Squad, as well as an outlet store on eBay. Co. operates two segments: Domestic
Standard & Poors’ investment outlook for computer and electronic retail stocks is positive.
"Longer term, they expect consumer electronics retailers to further benefit from a shift
toward increased consumer use of digital products and services.
. At this point in the cycle,
we also see declines in average selling prices, which we think are hurting manufacturers,
helping to drive demand, and benefiting retail. As new products are introduced, we see
management of inventories and product mix becoming increasingly important in
determining which retailers will be the most successful."
"Longer term, we see a growing convergence between computers, televisions, cameras,
and telecommunications equipment. This should include portable devices that make it
increasingly easy to access information and entertainment. As to the impact of the
Internet, a growing availability of entertainment for downloading from home is likely to hurt
long-term sales of prerecorded disks and cassettes at stores, in our view. We believe that
the extent to which the Internet is used as a medium for downloading or distributing
recorded entertainment is likely to depend, in part, on the pace at which consumers switch
to faster Internet hook-ups, through such means as cable modems and digital subscriber
phone lines. Also, we expect that retailers will have increasing opportunities to sell devices
that play downloaded content, and possibly to sell new subscription services for music and
Circuit City Stores
Electronics Boutique Hldgs
Unusual Fact: At Best Buy’s website, under investor relations, they have archived their
earnings conference calls with analysts.
You can hear the question and answer session
Because of the expansion that Best Buy has experienced, they seem to be in the growth
stage of their life cycle, but perhaps the latter end of the growth stage, since they began
paying a dividend and buying back their stock, both characteristics of mature companies.