(Corrects paragraphs 1, 12, 13 to fix comparison after company said forecast was for adjusted and not GAAP margin)
* First goal is to stabilize sales, margins
* Seeks operating margin of 5 pct to 6 pct over time
* Looking at stores for cost savings as well
* Shares close nearly 1 pct lower
By Dhanya Skariachan
Nov 13 (Reuters) - Best Buy Co Inc is aiming to achieve operating margin of 5 percent to 6 percent over time, the company said on Tuesday, though investors and analysts were left wanting for details on how - and how soon - the new chief executive would turn around the world's largest consumer electronics chain.
The aggressive new targets come as Best Buy faces cutthroat competition from online and discount retailers like Wal-Mart Stores Inc and Amazon.com Inc.
CEO Hubert Joly got a difficult reception at an investor day in New York, as people questioned whether management was focusing too much on wringing higher sales out of existing customers rather than attracting new ones. Joly was named CEO on Aug. 20.
"I still think I am a little bit mixed on digesting the take-aways of the presentation. I think they said a lot of good things, but I think people were looking for a little bit more of a playbook and the next steps," said John Tomlinson, an analyst with ITG Investment Research, in New York. "There's a lot of pieces to the fixing story that seemed a little opaque and vague."
Best Buy's stock closed nearly 1 percent lower at $15.70 on Tuesday, continuing a slide that has knocked off a third of the company's market capitalization this year. The stock touched a 10-year low of $14.39 a week ago.
Dimitri van Toren, senior portfolio manager at Dutch asset manager Syntrus Achmea, which holds about 200,000 Best Buy shares, said he was worried about structural issues and a "management vacuum" at the retailer, but that he would stay in the stock despite concerns about the upcoming holiday season.
The meeting took place against the backdrop of a potential buyout offer from founder and former CEO Richard Schulze, who is expected to make an offer as soon as next month.
"I spend no time worrying about what our corporate structure will be," Joly told reporters after the event. "I tend to focus on decisions I can influence rather than decisions I can't influence."
A representative for Schulze did not immediately respond to a request seeking his thoughts on Joly's plan.
Joly said "it would have been ridiculous" to offer more concrete details after only a few weeks on the job. He said this meeting was more about setting the record straight and reassuring investors about the company's future.
"The perception was that Best Buy was dying," Joly said.
In a statement on Tuesday, the company said its short-term goal will be "to stabilize and then begin increasing its comparable-store sales and operating margin." Over time, it is aiming for a return on invested capital of 13 percent to 15 percent, in addition to a 5 percent to 6 percent adjusted operating margin target.
On a comparable basis, its operating margin in the last fiscal year was 4.7 percent. Over the past four quarters, the margin was 4.2 percent.
Joly said a mixture of excessive costs and price competition hurt margins, and that the retailer would turn to a wider variety of higher-margin, private-label products to boost results. One example is the company's own Insignia-brand electronics.
Best Buy has been struggling to combat a phenomenon known as "showrooming," where people visit its stores to look at products and then buy them online for less.
Joly acknowledged the company has suffered from a "price perception issue" among customers that it needed to address, as well as weakness in its online operations.
The head of the company's digital business said its online conversion rate - which measures how successfully Best Buy translates customer visits into actual sales - was only about half of what it should be.
"Many of these problems are a result of our own making," Joly said during the investor presentation.
Best Buy also said on Tuesday that it would pursue a plan to "optimize its store footprint on an ongoing basis," which suggested the company may look at ways to shrink or close stores, as some other big-box retailers have done. In late March, the company said it would close 50 large U.S. stores.
Joly warned that merely closing stores would not boost operating income, as most of the big-box stores are already profitable. Relocation to smaller space may be an option, however; he said 71 percent of the large-format stores have leases expiring within the next six years.
The details of Joly's long-awaited plan came roughly a week before the unofficial start of the year's biggest selling season.
The retailer, which has posted declines in same-store sales in eight of the last nine quarters, warned last month it expected earnings and same-store sales to fall again in the third quarter.
"I am already sick and tired of negative comps," Joly said, referring to same-store sales figures.
The CEO also admitted a number of past investments have not paid off and promised the new leadership would be "prudent" about that in the future, a nod to Wall Street's lingering concerns about spending by past management. (Reporting by Dhanya Skariachan in New York; Writing by Ben Berkowitz; Editing by Maureen Bavdek, Phil Berlowitz, Matthew Lewis and Jan Paschal)