Did Best Buy’s Holiday Strategy Prove Effective?

By Chris Lange Published Feb 26, 11:20AM EST

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Did Best Buy’s Holiday Strategy Prove Effective? — © Scott Olson / Getty Images

Best Buy Co. Inc. (NYSE: BBY | BBY Price Prediction) is scheduled to release its fiscal fourth-quarter financial results before the opening bell on Thursday. Analysts are calling for $2.75 in earnings per share (EPS) and $15.06 billion in revenue. The same period of last year reportedly had $2.72 in EPS and $14.8 billion in revenue.

The company previously issued guidance for the fourth quarter, and the company expects to see EPS in the range of $2.65 to $2.75 with Enterprise revenue in between $14.75 billion and $15.15 billion. Comparable sales are expected to grow 0.5% to 3.0%.

In the third quarter, Best Buy saw its domestic revenues grow 2.4% year over year to $8.96 billion. The increase was driven by comparable sales growth of 2.0% and revenue from GreatCall, which was acquired in the third quarter of last year.

Keeping pace in the e-commerce world, domestic online revenue increased 15% to $1.4 billion, primarily due to higher average order values.

During the holiday shopping season, Best Buy offered free next-day delivery on thousands of items all season long with no membership or minimum purchase required. Customers could also choose to pick up their products in a store within an hour of placing their order. The fourth-quarter numbers will be the judge of whether this strategy proved effective.

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Excluding Wednesday’s move, Best Buy stock had outperformed the broad markets with a gain of about 35% in the past 52 weeks. In just the past quarter alone, the share price is up roughly 13%.

A few analysts weighed in on Best Buy ahead of the report:

Nomura has a Hold rating and an $81 price target.
Oppenheimer has a Buy rating with a $105 price target.
Morgan Stanley rates it as Equal Weight with an $85 target.
Guggenheim has a Buy rating with a $100 target price.
The Jefferies Buy rating comes with a $101 price target.

Best Buy stock traded up about 3% at $84.42 on Wednesday, in a 52-week range of $61.58 to $91.99. The consensus price target is $89.68.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.