Best Buy unveils plans to grow sales, cash in on AI

Best Buy on Tuesday announced new plans to try to reverse a two-year sales slump and cash in on a much-awaited replacement cycle of pandemic-era purchases and a fresh wave of innovation.

The consumer electronics retailer said it would add trained sales teams to key parts of its stores, create more YouTube videos to pique customers’ curiosity and kick off a marketing campaign with a fresh tagline: “Imagine that.”

In an interview with CNBC, CEO Corie Barry said customers told Best Buy that retailers’ store experiences and the technology they offer have “lost a bit of [their] sparkle.” She added the consumer electronics innovation has hit a dry spell.

“That is our big focus this year,” she said. “Getting all of that ‘new’ back in there.”

One of Best Buy’s major hopes to drive sales comes from artificial intelligence-enabled laptops and smartphones.

Still, the retailer doesn’t expect its sales to improve overnight. The company has reported 10 consecutive quarters of declining comparable sales, a key metric that takes out the impact of store openings and closures. Best Buy said in May that it expects comparable sales for the full year to be roughly flat or to drop by as much as 3% compared to the prior year.

Best Buy expects revenue to range from $41.3 billion to $42.6 billion, a decline from $46.3 billion last year. The range would put its revenue slightly below the $43.6 billion for the pre-pandemic fiscal year that ended in early 2020.

Barry said consumers are still “making very clear, value-based decisions.”

Shares of Best Buy have reflected the sales struggles: As of Monday’s close, the stock has fallen about 36% from its all-time high of $138, which shares hit during the Covid pandemic.

Steven Zaccone, an equity research analyst who covers retail for Citi Research, upgraded Best Buy’s stock from sell to buy in early June, in part due to an expected wave of new products.

But he acknowledged trends have become tougher to predict as consumers watch their wallets after the highest inflation in decades and get distracted by the uncertainty of this year’s presidential election.

“People who are focused on the near term would say the category is still declining,” he said. “So the call is based on the hope that you’re going to have a pivot to growth.”

Last week, shoppers’ purchases of consumer electronics like tablets, TVs and Bluetooth speakers helped drive sales to a record $14.2 billion across U.S. retailers’ websites during Amazon’s two-day Prime event, according…