Best Buy Co., Inc. ( BBY Quick Quote BBY - Free Report) is among those retailers who have been resorting to extraordinary efforts to maneuver the coronavirus blues. The company is banking upon solid digitization efforts to proficiently cater to consumers amid such trying times. In fact, Best Buy’s quick shift to a contactless curbside service-only operating model in view of the coronavirus outbreak, has worked wonders. In general, curbside service has been gaining popularity as it reduces in-store hassles and is an effective tool for retailers this holiday season. Biggies like Walmart ( WMT Quick Quote WMT - Free Report) , Target ( TGT Quick Quote TGT - Free Report) and Kroger ( KR Quick Quote KR - Free Report) have also been benefiting from this model. Coming to Best Buy, the Richfield, MN-based company’s shares have appreciated 74% in a one-year span and outshone the broader S&P 500 composite’s rally of a mere 18.2%. No wonder the stock has also outpaced its industry’s 34.9% increase and the Retail-Wholesale sector’s 46.7% growth in the same time frame. A VGM Score of B further speaks of the Zacks Rank #1 (Strong Buy) stock’s strength. You can see . the complete list of today’s Zacks #1 Rank stocks here Encouragingly, the Zacks Consensus Estimate for fiscal 2021 earnings and sales are currently pegged at $7.12 and $45.31 billion, respectively. These estimates mirror year-over-year growth of 17.3% and 3.8%, respectively. Robust Online Efforts
Best Buy continues to focus on improving the buy-online, pickup-in-store service. We note that all of the company’s stores will continue shipping out online orders, with nearly 250 locations being strategically positioned to ship out considerably higher volumes. The company is also continuing to add third-party physical-pickup locations for online orders to enhance flexibility. Moreover, it has been adding functionalities to its curbside-pickup services for driving frequency, retention and personalization opportunities. Going forward, it will continue offering experiences such as curbside pickup, in-store consultations, and home installation and digital consultation services.
Such robust endeavors have been boosting Best Buy’s online revenues. Evidently, the company’s domestic comparable online sales increased 242.2% to $4.85 billion, mainly owing to higher traffic and conversion rates. As a percentage of overall domestic revenues, online revenues surged 3,700 basis points to 53.1%, higher than 16.1% recorded in the prior-year quarter. Meanwhile, strong demand for some of its newer products including digital health and fitness, at-home fitness equipment, sustainable living, outdoor activities and camping equipment also contributed to quarterly performance. Impressively, this sturdy performance is likely to continue ahead. At its second-quarter earnings call on Aug 25, management informed that it has been witnessing solid domestic online sales for fiscal third quarter, with the metric up approximately 175% during the first three weeks of August. We believe the company is poised well to competently serve its customers this holiday season, given the strength in its digital endeavors. What’s More?
Best Buy has also been witnessing growth in products that support stay-at-home practices such as tablets, computing devices and household appliances. Moreover, management stated that large appliances and home theaters benefited from more experiential shopping. These factors, coupled with digital growth, have been aiding the company’s top-line performance. In the recently reported quarter, Best Buy’s top line surpassed the Zacks Consensus Estimate for the fourth successive time and grew year over year. Meanwhile, it also delivered the 11th straight quarter of positive earnings surprise.
Best Buy’s long-term revenue goal looks achievable too. It had earlier stated to generate $50 billion in revenues by fiscal 2025. In fiscal 2020, the consumer-electronics company reported enterprise revenues of $43.6 billion. With that said, we believe the company’s tech-agnostic efforts poise it well for sustainable growth. Have You Seen Zacks’ 2020 Election Stock Report?
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