2.4% PR agency revenue growth
Best Buy, in the midst of a turnaround effort, is touting a data project dubbed Athena as key to its future.
During a conference call with analysts, CEO Hubert Joly said an overhaul of the company's marketing approach will be a key initiative over the next two years. The company plans to develop more targeted, relevant, personalized communications for customers using Athena, he said. That will include targeting customers based on past purchases, browse history, location and demographics.
"With Athena in place, over time, we will be able to shift more of our marketing efforts to targeted e-mail messages and offers," Mr. Joly said. "[We will] implement programs for key buying occasions like gifting, life events and registry, and new movers, in addition to creating greater engagement with customers for our loyalty program and our credit card offering."
A Best Buy spokeswoman declined to comment further on Athena.
Best Buy also said it hopes to use data to mitigate the impact of steep holiday discounts. Executives called the discounts "strategically important" to retaining and attracting new customers during the turnaround. In upcoming holiday seasons, however, Mr. Joly told analysts the retailer will send more personalized communications, as opposed to email blasts only focused on price.
Profit was $293 million in the quarter ended Feb. 1, compared with a loss of $409 million a year earlier. Sales, meanwhile, declined for a fourth straight quarter. Total sales fell 3% to $14.5 billion, while same-store sales dropped 1.2%.
There had been concerns that Mr. Joly's turnaround plan, dubbed "Renew Blue," was faltering, but today's results boosted confidence that the retailer is moving in the right direction. Mr. Joly has cut costs and slowed sales declines by dedicating more space to brands like Samsung. He also instituted a price-matching policy to compete with Amazon, while touting Best Buy's product assortment and knowledgeable staff.
"They get credit for doing all they can on cutting costs," said Brian Yarbrough, an analyst with Edward Jones & Co. in St. Louis view. "But at some point they will run out of cost savings and will have to find a way to grow the business."
--With contributions from Bloomberg News