- Initiatives like installment plan will increase sales of high-priced mobile phones.
- BBY continues to focus on online sales and cost cutting initiatives to drive future growth.
- It also offers an attractive yield with the lowest payout ratio among its peer companies.
- Best Buy came out yesterday with their holiday sales numbers and reported a 2.1% growth in enterprise sales and a 2.6% domestic comparable sales increase, excluding the 80-basis point estimated benefit of installment billing.
- The growth was driven by increased online traffic and higher conversion rates.
- A sharp decline of 14% in BBY’s stock places our price estimate of $33 at an approximate 5% discount to the current market price.
Best Buy: Time To Build Another Contrarian January Position?
- Best Buy reported solid holiday revenues and domestic comps.
- However, the company guided for weak sales growth in fiscal 2016 and difficult industry conditions, which led to another emotionally-fueled sell-off in shares of Best Buy.
- I believe the market overreacts to Best Buy's outlook.
- Does another contrarian position in Best Buy make sense?
- BBY got hammered after providing its outlook.
- While the company expects flat to slightly negative comp sales during the first half of 2015, its valuation more than accounts for these losses.
- Compared to other large, big box retailers, BBY has the best value.
- Best Buy put out a deftly titled press release this morning called "Best Buy Reports Increase in Holiday Revenue".
- Best Buy tactfully chose not to disclose in this press release that last year's 4th quarter revenues were down 13% year over year.
- Management listed 4 points of concern which have investors worried about the company's bottom line.
- Company’s strategic growth efforts are going to contribute to long-term success.
- The management is actively pursuing cost-cut opportunities to grow bottom-line.
- Analysts anticipating robust next five-year growth rate of 15% for BBY.
- Best Buy will be releasing its holiday sales numbers on January 15, 2015 - typically a preview of its Q4 earnings to be released on March 3, 2015.
- Best Buy's continuous process improvements have helped the company improve business efficiencies and save money as shown in its Q3 earnings that revealed net income nearly doubling.
- Best Buy should see sales momentum continue in Q4 as growth in entertainment should be aided by product refresh cycles in TVs, gaming, mobile, and computing.
- Best Buy should continue to gain market share as its rival hhgregg struggles and store count reductions at retailers like RadioShack and Sears bring more customers into Best Buy stores.
- Cheaper gas prices, improved consumer confidence, and early holiday sales totals by other retailers this past week may foreshadow a positive comparable sales Q4 for Best Buy.
- Best Buy combines strong price momentum, an extremely attractive valuation, a track record of beating EPS estimates and growth.
- Our price target of $47.38 implies 26.5% of upside to the current price.
- The Specialty retail group is attractively valued, and the market is just starting to react. Other names in the group worthy of further research include: SPLS, GME, & HD.
- Best Buy needs to shrink to grow - that is, to sustain the core business.
- Management has seized the low-hanging fruit of cost reductions; how they elevate customer service to increase their grasp of the customer segment is pivotal for success.
- BBY uncovered a hidden asset in the form of "ship-from-store," but they lag significantly in online operations, which limits growth potential.
Update: With Website Issues, Be Cautious About Best Buy
- Reports Friday morning that Best Buy's website is down.
- This is one of the specific reasons we avoid in-store retailers; trouble transitioning to e-commerce.
- We're bearish on Best Buy and the rest of the retail sector into the holidays.
- Best Buy's third quarter report showed evidence of a sustained turnaround.
- With momentum expected to continue, the firm should be looking forward to a strong holiday quarter.
- Trading at a reasonable multiple, the stock looks like it could deliver some upside over the next few months.
- The Best Buy's shift in strategy is a smashing success so far.
- With the holiday season right around the corner, I would recommend getting a position in Best Buy.
- Best Buy has attractive offers this holiday season, and bargain-seeking consumers will significantly boost revenue.
- Best Buy presented a blowout third quarter last week.
- Positive sales growth is the major takeaway from third quarter results.
- Buying Best Buy in the midst of turbulence in January 2014 has paid off very handsomely.
- I am going to stay the course for a little longer.
- Christmas shoppers this year are going out to buy, not browse.
- Big box retailers benefit from low prices, minimal competition within their niches.
- Most of these stocks are now fully valued.
- The quality of their websites matter.
BestBuy Q3 2014 Review: It Remains A Best Buy Idea
- BBY Q3 print indicates that recovery is on track.
- Solid US comps and online are most notable. Cost control allowed for EPS beat.
- Free cash growth encouraging, making a dividend increase a strong possibility.
3 Key Takeaways From Best Buy's Earnings You May Have Missed
- Best Buy had a solid third quarter, led by comparable sales growth of 2.2%.
- Besides top and bottom line performance, Best Buy provides very detailed analysis full of hints as to how it will perform this holiday season.
- The company also provides an unbiased outlook at how certain segments are performing, allowing to determine which companies may be a buy this holiday season.
Best Buy Earnings Preview: Online Revenue, Cost Cuts Will Drive Results
- Best Buy reports earnings after-hours today.
- Last quarter the company missed on revenue and beat on earnings due to run-rate cost cuts of $40 million.
- Last quarter revenue declined 4% Y/Y, offset by online revenue growth of 22%.
- The company has been hurt by the migration of sales from retail stores to online. I expect the same to occur this quarter.
- At 17x trailing earnings the stock is fairly valued.
- BBY reports on Thursday before market.
- The market has set its expectations after in-line quarters and tough comps. Easier comps going forward should be positive to the stock.
- Renew Blue strategy and digitizing marketing message are key to the turnaround. Stock is attractive at 5x EBITDA and 12x P/E.
- Best Buy Company, Inc. (BBY) is slated to report 3Q 2015 earnings before the bell on Thursday, November 20th.
- Adjusted or Non-GAAP Earnings Per Share: The Street estimate is $0.24 (range $0.13 to $0.30).
- Revenues: Analysts expect a decline of 3.1% y/y to $9.07 bln (range $8.88 bln to $9.27 bln).
Best Buy (BBY) Q3 2015 Results - Earnings Call WebcastNov. 20, 2014
Best Buy (BBY) Q2 2014 Results - Earnings Call WebcastAug. 26, 2014
Best Buy (BBY) Q1 2014 Results - Earnings Call WebcastMay. 22, 2014
Best Buy Co. Discusses Q2 2014 Results (Webcast)Aug. 20, 2013
Dec. 30, 2013, 8:32 AM
- Best Buy (BBY) lands on JPMorgan's list of nine "value" stocks that will outperform growth stocks in 2014.
- The retailer is now well-positioned after winning over both consumers and mobile device manufacturers with its new store format.
- For the value proposition, the investment firm points to BBY's 1.7% dividend yield and price-to-sales ratio.
- BBY +0.4% premarket.
Dec. 27, 2013, 9:09 AM
- The word "guarantee" was thrown around too loosely this holiday season by retailers, writes The Dallas Mornings News' Maria Halkias.
- While UPS (UPS) blames bad weather for falling short with some deliveries this year, the company only hired the same number of temporary workers as last year despite forecasts for booming online sales. FedEx (FDX) and the USPS also had their own glitches. The spottier-than-normal delivery record this year falls on the shoulders of the retail sector not shippers.
- What to watch: Online retail tracking firm StellaService reports that sellers such as Zappos, Amazon (AMZN), Wal-Mart (WMT), Best Buy (BBY), and Victoria's Secret (LB) scored well in meeting aggressive deadlines, although the cost may be high. Many of the firms upgraded late-ordering customers to express shipping to avoid a customer service backlash. Next year, deadlines may be earlier and holiday margins higher.
Dec. 26, 2013, 12:26 PM
- Best Buy (BBY +1.4%) has made impressive strides with its efforts to turn the impact of showrooming by consumers at stores into a positive.
- The company's marketing campaign and focus on higher-level customer service has helped consumer opinion on Best Buy improve markedly, according to social media tracking.
- Despite the gains, 10% of consumers polled say the ability to sample products at Best Buy still gives an advantage to Amazon.
Dec. 26, 2013, 12:12 PM
- Gift card sales were an out-performer in the retail sector this holiday season.
- Open network branded card sales rose 7.3% this year while retailers saw gift card sales shoot up 10, according to Corporate Executive Board.
- The consumer trend toward more gift card usage should provide a lift to MasterCard (MA +0.8%) and Visa (V +0.3%) as well as adding at least some support to retail sales in Q1 of 2014 as sales are booked.
- Related stocks: SBUX, BBY, HAWK, WMT, TGT, DNKN, MCD.
Dec. 23, 2013, 10:41 AM
- Best Buy (BBY +0.4%) says it will host a Christmas Eve Google+ Hangout session which will serve as one of the first tests by a big box retailer on whether or not Google's Shoppable Hangouts service could be a viable selling channel.
- The online initiative from Best Buy falls in line with a plan to become a tech-buying adviser of sorts to consumers. This year, the blue shirts at Best Buy have been given more freedom to walk along with consumers as they shop and compare.
Dec. 20, 2013, 7:06 AM
- In a note to clients yesterday, Wedbush analyst Michael Pachter forecast more accessories sales shifted to Amazon (AMZN) this holiday season with Amazon Prime growing to an estimated membership count of 15M-17M.
- Directly in the line of fire is Best Buy (BBY). The investment firm expects Best Buy to deliver a holiday period sales comp of 1.5% which includes a significant boost from the wave of new gaming consoles.
- Wedbush still rates BBY at Underperform, but has taken the edge of its previous dire outlook. The 12-month price target on BBY is doubled to $18.
Dec. 5, 2013, 9:54 AM
- Conn's (CONN +12%) lifts its forecast for full-year EPS to $2.75-$2.80 from $2.50-$2.56. Same-store sales at Conn's are expected to rise 22% to 25% for the fiscal year ending January 31, 2014.
- Best Buy (BBY -0.1%), on the other hand, has cut costs and focused its message to consumers on service and expertise. The company has stuck with electronics and mobile, but refined its selling channels.
- Sector watch: Though Best Buy has done a fine job with its turnaround in 2013, the soaring margins and momentum at Conn's from furniture and mattress sales are hard to ignore. The retail chain also derives a good chunk of its business by offering customers favorable credit terms, a temptation that Best Buy has resisted in the past due to the risk it brings into the equation.
Dec. 3, 2013, 3:43 AM
- Cyber Monday Internet sales climbed 16% from last year to a record $2.29B, Adobe estimates, with Internet transactions for the five-day Thanksgiving shopping period jumping 26% to $7.4B.
- Sales from mobile devices soared 80% yesterday and accounted for 18.3% of the total.
- "This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that's from a smartphone or a tablet," says JMP Securities analyst Ron Josey
- The National Retail Federation expects Internet transactions to grow 15% to $82B this holiday season, much faster than the 3.9% increase that the NRF projects for total sales.
- More on Thanksgiving and Black Friday sales.
- Stocks: AMZN, EBAY, WMT, BBY, TGT, JCP, M, FDO, DG, DLTR, FIVE, SHLD, BIG, GME, COH, GPS, LULU, ANN, EXPR, URBN, COH
- ETFs: XLP, XLY, VDC, XRT, VCR, RTH, PBJ, RETL, PEJ, IYK, FXG, IYC, SCC, FXD, RHS, UCC, PMR, UGE, RCD, PSL, PSCC, SZK, FDIS, FSTA, PSCD, PEZ
Dec. 2, 2013, 9:53 AM
- Gap (GPS +2%), Lululemon (LULU +1.9%), and Best Buy (BBY +1.2%) all trade higher after retail channel checks indicate traffic and sales were strong during the extended Black Friday weekend.
- Old Navy showed the biggest week-over-week gain in market share, according to Placed.
- Lululemon's customer base came out in droves and men's products performed well, notes Janney Montgomery.
- At Best Buy, it wasn't the foot traffic that looked promising, but signs that online and mobile sales showed a significant year-over-year gain.
- A trio of retailers which came out bruised after Black Friday on worries of lower store traffic are Coach (COH -2.2%), Macy's (M -1.4%) and J.C. Penney (JCP -3.6%).
Dec. 2, 2013, 2:24 AM
- The amount of money that consumers spent over the Thanksgiving weekend is estimated to have slipped 2.7% to $57.4B, the National Retail Federation says.
- The drop is in contrast to estimates that Thanksgiving and Black Friday sales at brick-and-mortar stores rose 2.3%.
- The average consumer spent $407.02 over the whole weekend, down 3.9% from last year.
- The number of shoppers increased to 141M people from 139M.
- The fall in spending came after retailers warned of a difficult holiday season and was due to the aggressive bargains on offer, a trend that is expected to continue.
- However, the NRF maintained its forecast that retail sales will grow 3.9% for the whole holiday whole season.
- Online sales climbed 17.3% on Thanksgiving and Black Friday, ComScore estimates, noting that the latter day attracted a record $1.2B in spending. The research firm expects Internet sales to rise 16% for the whole of the holiday season.
- The most visited sites on Black Friday were those of Amazon (AMZN), eBay (EBAY) Walmart (WMT), Best Buy (BBY) and Target (TGT).
- Total e-commerce sales hit $20.6B in the first 29 days of this holiday season, up 3.1% from last year, although this year includes more days.
- Today is Cyber Monday, which the NRF reckons will attract 131M shoppers vs 129M last year. But as with Black Friday, Cyber Monday has started a day early, with J.C. Penney (JCP) and Macy's (M) among those who began related promotions yesterday. Target has gone further and created "Cyber Week."
- More on Thanksgiving sales.
- Tickers: FDO, DG, DLTR, FIVE, TGT, SHLD, BIG, GME, COH, GPS, LULU
- ETFs: XLP, XLY, VDC, XRT, VCR, RTH, PBJ, RETL, PEJ, IYK, FXG, IYC, SCC, FXD, RHS, UCC, PMR, UGE, RCD, PSL, PSCC, SZK, FDIS, FSTA, PSCD, PEZ
Dec. 1, 2013, 1:38 AM
- Thanksgiving and Black Friday sales at brick-and-mortar stores rose 2.3% on year to $12.3B, ShopperTrak estimates.
- The research firm reiterates its forecast that sales for the whole of the holiday season will increase 2.4%, the weakest growth since 2009.
- Foot traffic for both days grew 2.8% to over 1.07B store visits.
- Online sales +20% on Thanksgiving and +19% on Black Friday, says IBM.
- Mobile traffic accounted for almost 40% of all online visits on Friday. Mobile sales rose to 26% of total online sales on Thursday and were around 22% on Friday.
- Increased store openings on Thanksgiving seem to have eaten into sales on Black Friday, while online transactions again took business away from physical purchases.
- Anecdotal evidence suggests that consumers came with plans of what they wanted to buy, with the result that there was much less impulse shopping. (PR)
- More on Thanksgiving Black Friday sales.
- Tickers: AMZN, EBAY, FDO, DG, DLTR, FIVE, TGT, BBY, WMT, SHLD, BIG, GME, COH, GPS, LULU, JCP, M.
Nov. 29, 2013, 3:39 PM
- A consumer survey by Placed indicates that aggressive retailers ruled the day on Thanksgiving to give them a nice head of steam heading into the full Black Friday weekend.
- The dollar store group (FDO, DG, DLTR, FIVE) in particular appears to have picked up some needed market share.
- In a mild surprise, Target (TGT) only ranked as the 6th most visited retailer behind some discounters and Best Buy (BBY), according to the latest data crunch
- Biggest week-over-week market gains by major retailers: 1. Kmart (SHLD) 2. Toys 'R' Us 3. Wal-Mart (WMT) 4. Big Lots (BIG) 5. Family Dollar.
- Full report from Placed.com
Nov. 29, 2013, 11:50 AM
- Ignore the media reports of lines wrapping around city blocks for Best Buy (BBY +1.4%) this Black Friday and focus on the retailer's integrated in-store and e-commerce initiatives, say retail watchers.
- Though shares of BBY have ripped the second-highest gain in the S&P 500this year, they still have fresh legs due to the company's significant supply chain improvements and cost control measures this year.
- What to watch: Amazon and Wal-Mart are still taking market share from Best Buy in key categories, but due to CEO Hubert Joly's deft hand the retailer is improving its bottom line quicker than its peers.
Nov. 29, 2013, 7:35 AM
- Target (TGT) reportedly has seen strong store traffic and 2X more early orders on Target.com than a year ago.
- Best Buy (BBY) and GameStop (GME) look set for a huge day with many reports of long lines, although some stores have already run out of XBox One and PlayStation 4 gaming consoles which could cut down on the festive mood.
- Informal checks at Coach (COH) outlets show slow traffic.
- Gap (GPS) in on the hot seat with inventory and store management issues cropping up a bit more than expected. The retailer's strategy this Black Friday has been an all-out selling binge which could test the ability of its omnichannel operations.
- What to watch: The battle of Gap-brand Athleta vs. Lululemon (LULU) for market share heats up this year with many new Athleta stores popping up extremely close to LULU outlets. Athleta has more promotions today while Lululemon is relying on brand loyalty.
Nov. 29, 2013, 3:31 AM
- As has become an American tradition as ensconced as the Thanksgiving turkey, shoppers formed long queues in front of retail stores yesterday, with some even camping out, ahead of the doors opening for the Black Friday sales, which once again began on a Thursday.
- J.C. Penney (JCP) and Macy's (M) opened on Thanksgiving for the first time, while Kmart (SHLD), Old Navy (GPS) and Lord & Taylor opened in the morning.
- The National Retail Federation has forecast that up to 140M consumers will go shopping over the long weekend, up a bit from 139.4M last year. IBISWorld has projected that total sales through Cyber Monday will rise 2.2% to $40.5B.
- Mobile traffic increased over 31% yesterday as smartphones accounted for more than 23% of all Internet traffic. By 6 pm, online sales were up 10% over last year.
- To keep the crowds calm, Wal-Mart (WMT) handed out wristbands, Best Buy (BBY) used a ticketing system, and Target (TGT) had security staff ride segways in the parking lots to increase their visibility.
Nov. 26, 2013, 4:57 AM
- Consumers who think they'll be getting huge discounts on Black Friday might want to think again. In the words of the WSJ's Suzanne Kapner, "those bargains will be a carefully engineered illusion."
- Retailers and suppliers first work out the lowest price they can sell a product at and still make the profit they want, and then they jack up the "suggested retail price" so that the retailer can later offer a big discount.
- Another tactic is for stores to raise selling prices just before the holiday season discount period kicks in.
- Retailers: WMT, JCP, M, SHLD, JOSB, MW, KSS, BBY, TGT, HD
- ETFs: XLY, XRT, VCR, RTH, RETL, PEJ, IYK, FXD, PMR, UGE, RCD, SZK, PSCD, FDIS, PEZ
BBY vs. ETF Alternatives
Best Buy Co Inc Best Buy Co Inc is a retailer of technology products, including tablets and computers, televisions, mobile phones, large and small appliances, entertainment products, digital imaging and related accessories.
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