Retail

What to Expect From Best Buy Earnings

Chris Lange

Published: February 24, 2016 2:10 pm

Last Updated: January 13, 2020 12:46 pm

Best Buy Co. Inc. (NYSE: BBY) is set to report its fiscal fourth-quarter financial results before the markets open on Thursday. The consensus estimates call for $1.39 in earnings per share (EPS) on $13.61 billion in revenue. The same period from the previous year had $1.48 in EPS on revenue of $14.21 billion.

This company has become the retail rags-to-riches story over the past three years as it not only has survived, but most of the big-box retail competition has gone to the graveyard as Best Buy has grown its brand smartly. The company continues to combat challenging conditions by reducing costs, pricing competitively, optimizing stores and enhancing distribution. The store-within-store partnerships it has with suppliers like Samsung, Apple and Google continue to drive more store traffic and product sales. Best Buy’s online channel growth also looks very promising, as it continues to battle Amazon.

The company is expected to grow overall 2015 earnings by a very solid 27%. One other huge tailwind for the electronics giant is lower gasoline prices that are continuing to put more money in consumers’ wallets. That could start to push discretionary buying even higher this year as wage growth also kicks in. New products from the top vendors are also luring customers in for holiday shopping.

A few analysts weighed in on Best Buy prior to the earnings report:

• Goldman Sachs has a Neutral rating with a $33 price target.
• Oppenheimer has a Market Perform rating.
• BB&T has an Underweight rating.

So far in 2016, Best Buy has been relatively flat, with the stock up only 1.5% year to date. Over the past 52 weeks, the stock is down nearly 18%.

Shares of Best Buy were trading at $30.98 on Wednesday, with a consensus analyst price target of $34.41 and a 52-week trading range of $25.31 to $42.00.