"The fundamental issues at Best Buy have nothing to do with "showrooming," but everything to do with the company's own internal issues. Back in the time when I rated the stock a 'Buy' the internal organization and culture were strengths, while during this long down cycle, the opposite has been true."Renew Blue was a valuable start to a turnaround process that is still in its early innings. The Wall Street Journal reports today, "Recent results suggest that last year's fears over showrooming were overblown" My basic principle for reading the financial press has a three-fold test: a trend being written about has either (1) long ago gone out to sea and is of historical interest only, or (2) it is a manifestation of the herd instinct and is of limited substance, or (3) it is entirely self-serving for some interest group, in which case the investor has to 'follow the money.' Reading the financial press for a glimpse into the future is not time well spent.
All this being said, Best Buy's meteoric share price rise is way ahead of any reasonable projection of earnings growth, unless it is getting an unwarranted multiple expansion. Technology choices for consumers, especially when looking at manufacturer's websites or undifferentiated websites like Amazon, are overwhelming and confusing. Price may be important when the consumer has settled on a specific product.
Let's say a consumer is looking for a new laptop. Windows or Mac? If Windows, then go to Windows 7 and skip the new OS. or go to Windows 8.1 now, but with touchscreen or not? If Windows 8.1 touchscreen, then convertible or not? Windows 365 or Windows single, permanent license? What about a Chromebook to avoid the issues of OS and Office? But, more expensive WinTel laptops offer better performance and screens than Chromebooks for viewing movies. What to do? It makes my head spin.
Like George Zimmer or Joe Namath, I "guarantee" that the average consumer can use help to make the best decision for their own, misunderstood needs. This is where a store-based retailer could add value to the consumer's tech choice nightmare. Is that retailer Best Buy? That result isn't in yet.