MINNEAPOLIS _ Best Buy Co. executives on Tuesday set "thoughtfully ambitious" financial targets for the next three years, expressing confidence that the turnaround strategy they started five years ago has positioned the company for growth.
With the forecast, they launched a half-day meeting with analysts and institutional investors at the company's headquarters in suburban Minneapolis.
"We went from, customers don't like us anymore five years ago, to they now like us," Chief Executive Hubert Joly said in a morning meeting with reporters. "We'd like them to love us."
The electronics retailer is aiming for annual revenue of $43 billion for fiscal 2021, a 9 percent increase from fiscal 2017, which was the final year of the turnaround effort the company referred to as its "Renew Blue" transformation.
The company forecast it will deliver annual earnings per share of $4.75 to $5, an 8 to 9 percent increase over last year. Operating income is expected to grow as much as $2 billion, an increase of 17.6 percent.
If Best Buy hits the high end of all the sales and profit targets, the company would also have achieved a slight increase in profit margin, a feat for a company that mainly sells products that experience rapid declines in profitability.
Even so, the forecast fell short of analysts' expectations, and Best Buy shares fell 8 percent on the day, wiping out gains achieved over the summer months. The company's shares are still up more than 30 percent for the year.
Joly declined to discuss the company's outlook for the upcoming holiday season, in which Best Buy typically earns a third of its annual revenue.
With consumer confidence high, new iPhones on the market and its stores brimming with the latest gadgets from Amazon, Samsung and Google, it could be a sign of how competitive the season will become.
Joly signaled that more broadly, Best Buy won't shy from being bold and aggressive.
"This is the time to play to win and drive results," he said.
Joly declared the Renew Blue process officially completed in March.
The company now will focus on growth and continued efficiencies that it projects will carve $600 million in savings by the end of January 2021, when the company ends its fiscal year to grab sales from the holiday shopping season.
The company aims to focus on its connected home services that take advantage of its Geek Squad expertise and building more predictable revenue streams from ongoing relationships with customers.
Best Buy believes demographics are in its favor as millennials come of age and set up their own homes and an aging population that is turning to technology to help do everything from seeing who's at the front door to staying connected to grandchildren.
Best Buy is making a big bet that focusing on its growing in-home services and a sales mindset aimed at helping people find solutions to their tech-filled world will pay off.
"There is little tolerance on part of consumers for mediocrity," Joly said. "Consumers are sophisticated. They're demanding."
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