It's been five years since Best Buy held an investor meeting. And while much has changed since the last one, there will still be skeptics in the audience at its Richfield, Minnesota, headquarters.
At its last one, in November 2012 in New York, then-new chief executive Hubert Joly laid out his transformation plan "Renew Blue" to reverse sales declines and improve profitability through cost cuts and growing online sales.
Best Buy did just that.
"Five years ago the times were different. We had negative comps. Our margins were going down. There were questions about whether we were going to survive," Joly acknowledged in an exclusive CNBC interview.
Earlier this year, Joly concluded the transformation was complete.
"We've had four years of positive comps. Our margins have expanded. We have been, in the last five years, in the top 10 percent of the S&P 500 from a total shareholder return standpoint. Customer satisfaction is up. We're gaining share," he said.
"We've become relevant again," Joly said, smiling. "And I couldn't be more proud of what our associates have accomplished."
Speaking to CNBC ahead of the meeting, he outlined areas where he sees potential growth, such as in the connected home market and with smartphones. He said the transformation strategy was mainly about "fixing what was broken." The new strategy, Best Buy 2020, pivots and is "focused on growth.
Tuesday morning Best Buy released new financial targets for fiscal 2021 that it will discuss in detail at the meeting, as it outlines its plans for the next phase of growth. Investors were clearly disappointed, sending shares down more than 8 percent.
Revenue is expected to grow to $43 billion in fiscal 2021, versus $39.4 billion in fiscal 2017. Meanwhile, the company will look to realize $600 million in annual cost savings by the end of fiscal 2021.
As a result, Best Buy estimates its adjusted operating income in fiscal 2021 will be between $1.9 billion to $2.0 billion versus $1.7 billion in fiscal 2017. On an adjusted basis, its earnings are projected to be in the range of $4.75 to $5.00 a share, which is an 8 to 9 percent compound annual growth rate from fiscal 2017.
"We've taken the time to look at the strategic landscape. And we think that we are operating in a very attractive environment that's full of growth opportunities," Joly said.
Still, Best Buy will have to sell this strategy to investors. But that's nothing new, five years ago, some had doubted whether Joly was right for the job. While he had turnaround experience, he had spent the last eight years in the hospitality industry and was leaving his position as CEO of hotel group Carlson to lead a U.S. consumer electronics retailer.
"We were consistently skeptical of Mr. Joly's lack of retail experience," Wedbush analyst Michael Pachter said in a note to investors. However, he added, "the company has executed nearly flawlessly since CEO Hubert Joly joined five years ago."