Core Viewpoint - Wall Street analysts predict a decline in Best Buy's quarterly earnings and revenues, with earnings per share expected to be $2.39, reflecting a 12.1% year-over-year decrease, and revenues projected at $13.65 billion, down 6.8% from the previous year [1]. Revenue Estimates - Analysts estimate 'Revenue by Product Category- Domestic- Computing and Mobile Phones' at $5.34 billion, indicating a year-over-year decline of 5.2% [4]. - 'Revenue by Product Category- Domestic- Consumer Electronics' is expected to reach $3.85 billion, reflecting a 7.7% decrease year-over-year [4]. - 'Revenue by Product Category- Domestic- Appliances' is projected at $1.32 billion, showing a decline of 12.6% from the prior year [5]. - 'Revenue by Product Category- Domestic- Entertainment' is anticipated to be $1.18 billion, indicating an 11.2% decrease year-over-year [5]. - 'Geographic Revenue- Domestic' is expected to be $12.46 billion, reflecting a 7.1% decline from the previous year [5]. - 'Geographic Revenue- International' is projected at $1.18 billion, indicating a 4.7% decrease year-over-year [6]. Store Metrics - The estimated 'Number of stores - International - Total' is 160, unchanged from the same quarter last year [6]. - 'Number of stores - Domestic - Pacific Sales Stores' is expected to remain at 20, consistent with the previous year [7]. - 'Number of stores - International - Canada Best Buy Stores' is projected to be 129, slightly up from 128 in the same quarter last year [7]. - 'Number of stores - International - Canada Best Buy Mobile Stand-Alone Stores' is expected to be 31, down from 32 year-over-year [8]. - 'Number of stores - Domestic - U.S. Best Buy Stores' is forecasted to be 889, down from 901 in the same quarter last year [8]. - The total estimated 'Number of stores - Domestic - Total' is 957, down from 965 in the same quarter last year [9]. Stock Performance - Best Buy shares have returned +6.3% over the past month, contrasting with a -2.2% change in the Zacks S&P 500 composite [9].

The market expects Best Buy (BBY) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended January 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on March 4, 2025, might help the stock move higher if these key numbers are better ...

Core Insights - Best Buy Company Inc. (BBY) is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 13.74, which is higher than the Zacks Retail - Consumer Electronics industry's average of 10.46, reflecting a strong valuation driven by stock price appreciation due to innovative store formats and enhanced digital offerings [1][3] - The stock has increased by 13.6% over the past year, significantly outperforming the industry's growth of 5.3%, and is approaching its 52-week high of $103.71 [3] Digital Transformation & Omnichannel Strategy - Best Buy's digital enhancements, including an AI-powered Gift Finder and mobile app upgrades, have led to increased customer engagement, resulting in 31% of domestic revenues coming from online sales in Q3 of fiscal 2025 [5] - Investments in AI-driven order routing and delivery optimization have improved delivery times, with 45% of digital revenues being picked up in stores, indicating a successful integration of digital and physical shopping experiences [6] - The company reported a 5.2% increase in comparable revenues for computing and tablets in the fiscal third quarter, with laptops growing by 7% year over year, the highest growth rate since April 2021 [6][7] Innovative Store Formats & Market Expansion - Best Buy is experimenting with new store formats tailored to local market needs, such as a 15,000-square-foot store in Bozeman, MT, which offers a reduced product assortment while optimizing operations [8] - The expansion of the outlet strategy, which includes refurbished and open-box products, caters to budget-conscious consumers and is supported by Geek Squad services [9] Gross Margin Improvement & Financial Resilience - The company has achieved a 60-basis-point year-over-year improvement in gross margin in the fiscal third quarter, driven by strategic pricing and cost-saving measures [10] - The Total Tech program's pricing adjustments and streamlined services have contributed to profitability while providing value to customers [10] Revenue Challenges - Despite positive developments, Best Buy's enterprise revenues declined by 2.9% year-over-year in the fiscal third quarter, with domestic revenues falling by 3.3% due to weak demand in key product categories [11][12] - International revenues also saw a decline of 1.6% year-over-year, highlighting ongoing challenges in stabilizing revenues amid competition and cautious consumer spending [12] Final Thoughts - Investors may consider holding onto Best Buy stock due to its strong digital and omnichannel strategy, innovative store formats, and focus on premium products, positioning the company for growth despite certain challenges [13][14] - Best Buy's gross margin improvements and efficient market expansion strategies suggest potential resilience against short-term volatility, making it a solid investment choice for those confident in its long-term adaptability [14]

Best Buy is preparing to launch a digital marketplace platform that will allow third-party sellers to integrate their products into the retailer’s website and app.The new Best Buy Marketplace will launch this summer, the company said in a Thursday (Jan. 16) announcement.“We’re incredibly excited to roll out Best Buy Marketplace later this year and provide our customers an expanded assortment of products, new categories and the ability to bring them emerging tech more quickly,” Frank Bedo, chief marketplace ...

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Revenue Decline and Challenges - Best Buy reported a 2.9% drop in enterprise revenues in Q3 FY2025, with domestic revenues falling 3.3% due to muted consumer demand in key categories like appliances, home theater, and gaming [1] - International revenues declined 1.6%, reflecting additional challenges in stabilizing top-line performance amid growing competition and cautious consumer spending [1] - Comparable sales continue to slide, highlighting difficulties in maintaining revenue stability [1] Market and Competitive Pressures - Inflationary pressures, election-related distractions, and consumer hesitancy have led to inconsistent demand, particularly in non-essential categories [2] - Increasing competition from major players like Amazon, Walmart, and Target has intensified pressure on Best Buy [6][7] - Underperformance in high-margin categories like gaming, home theater, and appliances signals deeper structural issues, limiting profitability recovery avenues [8] Stock Performance and Valuation - Best Buy's stock has fallen below critical technical thresholds, including its 50-day moving average of $89.69, raising concerns about short-term outlook [3] - The stock has lost 8% over the past month, trading 17.5% below its 52-week high of $103.71 [9] - Best Buy is trading at a premium with a forward 12-month P/E ratio of 12.95 compared to the industry's 11.69, raising questions about its valuation [21] Growth Initiatives and Positive Drivers - Best Buy's computing and tablet categories showed strong performance, with a 5.2% comparable sales growth in Q3 FY2025, driven by a 7% rise in laptop sales [12] - The paid membership program contributed to a 60-basis-point gross margin expansion in Q3 FY2025, driven by higher renewal rates and increased member spending [13] - Omnichannel strategy has solidified market leadership, with online sales accounting for 31% of domestic revenues and enhanced app features improving operational efficiency [14] - Store refresh initiatives and expansion into smaller-format stores, such as a 15,000-square-foot location in Bozeman, MT, have driven engagement and category-specific improvements [15] - International expansion through the Best Buy Express collaboration with Bell Canada has diversified its footprint, entering 61 Canadian markets [17] Guidance and Earnings Outlook - Management projected Q4 FY2025 comparable sales between flat and a 3% decline, with full-year sales guidance revised downward to $41.1-$41.5 billion [16] - The Zacks Consensus Estimate for earnings per share has been revised downward by 10 cents and 22 cents for the current and next fiscal year, respectively [18] Summary of Key Challenges - Persistent revenue decline, underperformance in high-margin categories, and reliance on promotional strategies raise concerns about Best Buy's near-term prospects [24] - The breach of critical technical levels and tempered guidance reflect ongoing challenges in a volatile consumer spending environment [24]

Partnership Enables Best Buy Ads Canada to Drive Engagement and Loyalty NEW YORK, Dec. 17, 2024 /PRNewswire/ -- Rokt, the leading ecommerce technology company using machine learning and AI to make transactions more relevant to each shopper, today announced it has partnered with Best Buy Ads Canada ahead of the holiday season to deliver curated transaction experiences to the company's online customers. Best Buy Ads Canada will use Rokt's technology to power highly relevant messages from third-party brands, w ...

The holiday shopping season is the time of the year for retailers in the consumer discretionary sector to get in the black. While some retailers like RH NYSE: RH and Williams-Sonoma Inc. NYSE: WSM are the “haves” and are expected to have a strong holiday season, many retailers are the “have nots” and already presumed to have weak results. This has already led to investors dumping shares for tax harvesting purposes, but the bar may have been set too low. Here are three stocks expected to have weak holiday sa ...

The Best Buy in Montebello, California, on Black Friday, November 29, 2024. (Photo by ETIENNE ... [+] LAURENT / AFP) (Photo by ETIENNE LAURENT/AFP via Getty Images)AFP via Getty ImagesBest Buy’s stock (NYSE: BBY), an electronics specialty retailer, has increased 12% from around $78 to $87 (as of Dec 9, after close) year-to-date, underperforming the broader indices, with the S&P growing about 28% over the same period. At the same time, a tough comparison with the pandemic, stimulus-induced growth, and inflat ...

Financial Performance - Best Buy reported revenue of $9.4 billion for the third quarter of fiscal 2025, a decrease of 3.2% compared to the same period last year[71]. - Comparable sales declined by 2.9% in the third quarter and 3.7% for the first nine months of fiscal 2025, reflecting challenges in the consumer electronics industry[71]. - Gross profit for the third quarter was $2.2 billion, representing a gross profit margin of 23.5%[71]. - Selling, general and administrative expenses (SG&A) were $1.9 billion, accounting for 19.8% of revenue in the third quarter[71]. - Operating income for the third quarter was $350 million, with an operating income margin of 3.7%[71]. - Net earnings for the third quarter increased to $273 million, with diluted earnings per share of $1.26[71]. Domestic Segment Performance - Domestic segment revenue for the three months ended November 2, 2024, was $8,697 million, a decrease of 3.3% compared to $8,996 million for the three months ended October 28, 2023[78]. - Comparable sales for the domestic segment decreased by 2.8% in the three months ended November 2, 2024, compared to a decline of 7.3% in the prior year[78]. - Domestic gross profit for the three months ended November 2, 2024, was $2,049 million, with a gross profit margin of 23.6%, up from 22.9% in the prior year[78]. - Domestic SG&A expenses for the three months ended November 2, 2024, were $1,716 million, representing 19.7% of revenue, compared to 19.2% in the prior year[78]. - Domestic operating income for the three months ended November 2, 2024, was $337 million, with an operating income margin of 3.9%, up from 3.7% in the prior year[78]. International Segment Performance - International segment revenue for the three months ended November 2, 2024, was $748 million, a decrease of 1.6% compared to $760 million for the three months ended October 28, 2023[81]. - Comparable sales for the international segment decreased by 3.7% in the three months ended November 2, 2024, compared to a decline of 1.9% in the prior year[81]. - International gross profit for the three months ended November 2, 2024, was $168 million, with a gross profit margin of 22.5%, up from 22.1% in the prior year[81]. - International SG&A expenses for the three months ended November 2, 2024, were $155 million, representing 20.7% of revenue, compared to 19.9% in the prior year[81]. - International operating income for the three months ended November 2, 2024, was $13 million, with an operating income margin of 1.7%, down from 2.4% in the prior year[81]. Tax and Cash Management - Best Buy's effective tax rate decreased to 23.9% in the third quarter of fiscal 2025, down from 24.7% in the same quarter last year[75]. - Non-GAAP effective tax rate for the three months ended October 28, 2023, was 24.7%, with a decrease attributed to increased tax benefits from green energy incentives[86]. - Cash and cash equivalents as of November 2, 2024, were $643 million, a decrease from $1,447 million on February 3, 2024, primarily due to dividend payments and capital expenditures[89]. - Total cash provided by operating activities for the nine months ended November 2, 2024, was $561 million, compared to $290 million for the same period in the previous year[91]. - Restricted cash decreased to $295 million as of November 2, 2024, from $423 million on October 28, 2023, primarily due to releases of product protection reserves[96]. Capital Expenditures and Shareholder Returns - Capital expenditures are expected to approximate $750 million in fiscal 2025, down from $795 million in fiscal 2024[92]. - The total cost of shares repurchased in the third quarter of fiscal 2025 was $135 million, with an average price per share of $95.43[98]. - Cash dividends declared and paid increased to $202 million in the third quarter of fiscal 2025, up from $201 million in the same period last year[98]. Strategic Initiatives - Best Buy plans to reduce its Domestic store count by approximately 10 to 12 stores in fiscal 2025[74]. - The company is focusing on enhancing its App and in-store experiences to drive customer engagement and sales growth[67]. - The company is exploring opportunities to leverage its scale for incremental profitable revenue streams over time[70]. Interest Rate Exposure - As of November 2, 2024, the company had $0.9 billion in cash, cash equivalents, and restricted cash, with $0.5 billion of debt swapped to floating rate, resulting in a net asset balance exposed to interest rate changes of $0.4 billion[109]. - A 50-basis point increase in short-term interest rates would lead to an estimated $2 million increase in interest income, while a decrease of the same magnitude would result in a $2 million decrease[109]. Foreign Currency Impact - Foreign currency exchange rate fluctuations negatively impacted revenue by approximately $6 million in the third quarter and $25 million in the first nine months of fiscal 2025[111].