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It has been a challenging environment for most retailers as more and more shoppers now prefer to shop online. Amazon now accounts for more than half of every new dollar spent online in America and few retailers are able to compete with the e-commerce giant. Best Buy is one of those select retailers. It is the Bull of the Day today.
About the Company
Headquartered in Richfield, MN, Best Buy (BBY - Free Report) is a leading specialty retailer of technology products, services and solutions, with approximately 1,600 stores in North America. Domestic Operations accounted for 92% of FY17 total revenue.
According to the company, 70% of the U.S. population lives within 15 minutes of a Best Buy store. That has helped the retailer to improve its e-commerce operations as shoppers can purchase online and pick up from a nearby Best Buy store, within two days in most cases.
Q4 Earning Beat
The retailer reported on March 1. Adjusted earnings of $1.95 per share beat the Zacks Consensus Estimate of $1.66, and were up 27.5% from the prior-year quarter. Total revenues of $13,482 million, were however shy of the Zacks Consensus Estimate of $13,608 million.
Guidance was also below street estimates and shares fell about 4.5% after the report. They have recovered nicely since then as bargain hunters rushed to buy the dips.
Returning Capital to Shareholders
Best Buy continues to boost shareholders’ value through dividends and share repurchases. Earlier this month, they announced a new $3 billion share repurchase plan expected to be completed over the next two years as well as a 21% increase in the quarterly dividend to $0.34 per share. During the reported quarter, they returned approximately $314 million via share repurchases and dividends.
Rising Estimates
The Zacks Consensus Estimate for FY 2017 and FY 2018 have surged to $3.68 per share and $3.94 per share respectively, up from $3.50 and $3.69, before the results.
Amazon to Open Brick & Mortar Store for Electronics?
The New York Times reported last week that Amazon is exploring the idea of opening stores to sell products like furniture and home appliances, that shoppers prefer to view and buy in-person. The e-commerce behemoth already has five physical book stores in the US, with five more in the works.
It just goes to show that certain shopping experiences are possible only in physical stores and cannot be replicated online. If Best Buy continues to provide excellent shopping experience and prevent shoppers from buying on Amazon by matching their prices, they may continue to grow.
The Bottom Line
In addition to a top Zacks Rank of #1 (Strong Buy), the stock has a VGM Score of “A”. Further, with a dividend yield exceeding 2.9%, it is worth considering.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Bull of the Day: Best Buy (BBY)
It has been a challenging environment for most retailers as more and more shoppers now prefer to shop online. Amazon now accounts for more than half of every new dollar spent online in America and few retailers are able to compete with the e-commerce giant. Best Buy is one of those select retailers. It is the Bull of the Day today.
About the Company
Headquartered in Richfield, MN, Best Buy (BBY - Free Report) is a leading specialty retailer of technology products, services and solutions, with approximately 1,600 stores in North America. Domestic Operations accounted for 92% of FY17 total revenue.
According to the company, 70% of the U.S. population lives within 15 minutes of a Best Buy store. That has helped the retailer to improve its e-commerce operations as shoppers can purchase online and pick up from a nearby Best Buy store, within two days in most cases.
Q4 Earning Beat
The retailer reported on March 1. Adjusted earnings of $1.95 per share beat the Zacks Consensus Estimate of $1.66, and were up 27.5% from the prior-year quarter. Total revenues of $13,482 million, were however shy of the Zacks Consensus Estimate of $13,608 million.
Guidance was also below street estimates and shares fell about 4.5% after the report. They have recovered nicely since then as bargain hunters rushed to buy the dips.
Returning Capital to Shareholders
Best Buy continues to boost shareholders’ value through dividends and share repurchases. Earlier this month, they announced a new $3 billion share repurchase plan expected to be completed over the next two years as well as a 21% increase in the quarterly dividend to $0.34 per share. During the reported quarter, they returned approximately $314 million via share repurchases and dividends.
Rising Estimates
The Zacks Consensus Estimate for FY 2017 and FY 2018 have surged to $3.68 per share and $3.94 per share respectively, up from $3.50 and $3.69, before the results.
Best Buy Co., Inc. Price and Consensus
Best Buy Co., Inc. Price and Consensus | Best Buy Co., Inc. Quote
Amazon to Open Brick & Mortar Store for Electronics?
The New York Times reported last week that Amazon is exploring the idea of opening stores to sell products like furniture and home appliances, that shoppers prefer to view and buy in-person. The e-commerce behemoth already has five physical book stores in the US, with five more in the works.
It just goes to show that certain shopping experiences are possible only in physical stores and cannot be replicated online. If Best Buy continues to provide excellent shopping experience and prevent shoppers from buying on Amazon by matching their prices, they may continue to grow.
The Bottom Line
In addition to a top Zacks Rank of #1 (Strong Buy), the stock has a VGM Score of “A”. Further, with a dividend yield exceeding 2.9%, it is worth considering.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>