Best Buy Co Inc is aiming to achieve operating margin of 5 percent to 6 percent over time, the company said on Tuesday, though investors and analysts were left wanting for details on how - and how soon - the new chief executive would turn around the world's largest consumer electronics chain.
The aggressive new targets come as Best Buy faces cutthroat competition from online and discount retailers like Wal-Mart Stores Inc and Amazon.com Inc.
CEO Hubert Joly got a difficult reception at an investor day in New York, as people questioned whether management was focusing too much on wringing higher sales out of existing customers rather than attracting new ones. Joly was named CEO on Aug. 20.
I still think I am a little bit mixed on digesting the take-aways of the presentation. I think they said a lot of good things, but I think people were looking for a little bit more of a playbook and the next steps, said John Tomlinson, an analyst with ITG Investment Research, in New York. There's a lot of pieces to the fixing story that seemed a little opaque and vague.
Best Buy's stock closed nearly 1 percent lower at $15.70 on Tuesday, continuing a slide that has knocked off a third of the company's market capitalization this year. The stock touched a 10-year low of $14.39 a week ago.
Dimitri van Toren, senior portfolio manager at Dutch asset manager Syntrus Achmea, which holds about 200,000 Best Buy shares, said he was worried about structural issues and a management vacuum at the retailer, but that he would stay in the stock despite concerns about the upcoming holiday season.
The meeting took place against the backdrop of a potential buyout offer from founder and former CEO Richard Schulze, who is expected to make an offer as soon as next month.
I spend no time worrying about what our corporate structure will be, Joly told reporters after the event. I tend to focus on decisions I can influence rather than decisions I can't influence.
A representative for Schulze did not immediately respond to a request seeking his thoughts on Joly's plan.
Joly said it would have been ridiculous to offer more concrete details after only a few weeks on the job. He said this meeting was more about setting the record straight and reassuring investors about the company's future.
The perception was that Best Buy was dying, Joly said.
In a statement on Tuesday,