My only point is and has been the compressed margins in consumer electronics. Forward
growth in what consumer electronic products can push the stock price higher? AAPL looks
like it's driving market share and always keeps its margins stable!

Last edited on: 04-05-2007 11:52 am

yea, they did say they would have stores within stores, I am sure that will just be an
apple specific kiosk, maybe with an apple rep but I would suspect it would be better to
have reg employees just "run" them.

Ben

Also, did I hear correctly that there will be Apple stores within' the BBY stores? I'm a
bit concerned about the margin issue, but what I got from the call is they'll start to
improve during the 2nd half of their fiscal year. Part of the reason their margins are
lower is because they are opening a plethora of new stores, and their competition is
closing stores, which results in fire sales.

Having listened to the numbers and projections on the conference call, I am even more at
ease that BBY will continue to deliver, they said their strategy will easily offset the
decline in gross margin(which in all honesty I was scared about the number when it was
posted). Predict a 14% in growth annually for next year, nice and steady as usual. I
honestly don't hear anything in the way they are phrasing things either to indicate
uncertainty.

I guess only time will tell, but I still think it will go up to 60, prob 55 by summers
end, just a hunch.

Ben

Great debate and very interesting. But, never again.

Well I'll give you the accounting crack on this Profit margin which is equal to Gross
Profit/ total revenue. Where gross profit is equal to Net Sales minus cost of goods sold.


The company's own prediction is a 30% DECLINE in gross profit margins.

Effectively if gross profit margins decline 30% then cost of goods sold are going up
relative to sales (ie. higher sales of lower margin products).

once again refer back to the STOCKHOLDERS return on investment. I'm speculating on the
price of almost everything in consumer electronics coming down?????

But again I am asking what is the catalyst? Gross break it down for me! What new
promotions and new products??? I mean I see the catalyst with AAPL. I see catalysts coming
with a few other companies that I currently invest in. I don't see it with BBY.

Last edited on: 04-04-2007 07:59 pm

you are speculating with no real evidence on actual margins. THey have NEVER made money
on computers(well in the last 5 years at least), so those don't really matter they can't
even really decrease, home theater could drop, again refer to higher volume argument. Car
audio they make probably on average of 50% profit. They will push more warranties and
service because that is almost pure profit. Again, I just don't see them not adapting and
figuring out a way to continue to make money, even if it takes a quarter to adjust.

Ben

Last edited on: 04-04-2007 07:57 pm

dammit I hate the refresh it deletes my frickin response in the middle of typing.

Full disclosure, I own 225 shares of BBY. If it goes to 39, ok I will lose some profit I
have held it for at least 7 years and in that time it is up about 115% for me, so I am not
trying to hype or blindly hope it will continue I just have not seen any reason to think
it will go down that much and I have given reason as to why I think it will continue going
up. It is expanding market share, its closest competitor is having to cut people, which
is smart business wise but the public view of it will be further hurt because general
public doesn't like the idea of laying off a large portion of people, so that further
boosts BBY's public image.

Just my opinion but to me it is logical.

Ben