The balance sheet still looks fine. The company has $908 million in cash, but the sale of Best Buy Co., Inc. (NYSE:BBY) Europe should bolster this a bit. This compares to $1.68 billion in debt, $544 million of which is due within the next year. The company continues to pay a dividend, with a $0.17 per share payment announced a day after the report. There was speculation last year that the company would have to suspend its dividend, but its financial situation turned out to be stronger than those people assumed. The dividend currently yields 2.65%.
Why Best Buy has an advantage
If a customer looking to buy any kind of electronic device wants any chance of decent customer service, Best Buy is often the only game in town. It’s the only nationwide consumer electronics chain left, although it competes with the likes of Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT). Even with all the criticism about Best Buy employees, they’re experts compared to employees at Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT). One of Best Buy’s big initiatives is to improve the customer experience, and that includes increased employee training.
Those who criticize Best Buy are often far more knowledgeable about technology than the average consumer. But many people don’t know the first thing about Android, iPhones, or Windows Phones and desire someone to explain it to them. The Samsung Experience Shops are a great idea because it provides just that. Many people don’t know anything about setting up a home network or a home entertainment system, and Best Buy offers a solution to those people.
When Wal-Mart Stores, Inc. (NYSE:WMT) reported earnings earlier this month same store sales in the U.S. were down 1.4% year-over year. Target reported a same-store sales decline of 0.6%. So did Best Buy really do that badly, with a 1.1% decline in same-store sales which, as Joly said in the earnings call, would have been flat excluding the impact of the Super Bowl moving to the fourth quarter and other special circumstances?
The bottom line
Best Buy Co., Inc. (NYSE:BBY) is taking all the right steps, reducing costs and becoming more price competitive. Those who look at the financial results for more than 5 seconds can see that the quarter was profitable for Best Buy excluding the effects of write-offs and non-cash charges. Best Buy is engaged in a profitable turnaround, something that can’t be said for many other struggling retailers like RadioShack and J.C. Penney Company, Inc. (NYSE:JCP). Expect big things from Best Buy in the coming years.
The article The Turnaround Continues: Part II originally appeared on Fool.com and is written by Timothy Green.
Timothy Green owns shares of Best Buy. The Motley Fool has no position in any of the stocks mentioned. Timothy is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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