Analysts to Best Buy: Name Your Chief and Get Online


Consumer electronics chain Best Buy is in serious need of high-level leadership.

With no permanent CEO, its board chairman stepping down, and a chief financial officer leaving this Friday, skeptics say the “Big Box” chain could soon become the nextCircuit City.

Not true, says Anthony Chukumba, analyst for BB&T Capital Markets: Just look at the balance sheet.

“We think the notion they could be the next Circuit City is quite frankly ridiculous,” Chukumba said in an appearance on CNBC’s “Squawk on the Street.” “This is a company that did $50 billion in sales last year, was profitable, and has very strong free cash flow.”

On the other hand, Chukumba recently downgraded Best Buy to “hold” from “buy.” To change that, he’ll need a clear turnaround signal.

“They have the financial wherewithal to come up with a turnaround strategy,” he said. “It’s just a question of who and what that is going to be.”

Chukumba’s not the only one waiting. Peter Keith, retail analyst at Piper Jaffray, has a “neutral” rating on Best Buy — despite the company’s positive earnings reporton Tuesday.

“Interim CEO Mike Mikan laid out some interesting plans on the [analysts’] conference call, but we don’t know if he’s the permanent fit so it’s hard to get any confidence long term,” said Keith.

Keith says an official chief executive and a greater online sales presence are necessary for Best Buy’s future success.

An online platform is seen as a way to make up for the company’s current plans to close 50 large U.S. brick-and-mortar stores.

“I don’t think that their online platform is particularly robust, so I was pleased to hear Mikan talk about re-investing a lot of assets to make an improvement there,” Keith concluded.

—By CNBC’s Jennifer Leigh Parker

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Neither Anthony Chukumba nor Peter Keith personally own Best Buy shares, but their respective firms, BB&T Capital Markets and Piper Jaffray, make a market (match buyers and sellers) in the company’s securities.


Follow Jennifer Leigh Parker on Twitter @jparker741.