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Best Buy (BBY) to Post Q4 Earnings: What Awaits the Stock?

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Best Buy Co., Inc. (BBY - Free Report) is likely to register top- and bottom-line growth when it reports fourth-quarter fiscal 2021 numbers on Feb 25, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $17,197 million, which indicates an increase of 13.2% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has remained stable in the past 30 days at $3.46 per share. The consensus mark suggests a rise of 19.3% from earnings of $2.90 reported in the year-ago quarter. The company delivered an earnings surprise of 17% in the last reported quarter. Notably, this specialty retailer has a trailing four-quarter earnings surprise of 35.6%, on average.

Key Aspects to Note

Best Buy’s top line during the fourth quarter is likely to have gained from consumer’s inclination toward products that support stay-at-home practices amid the coronavirus pandemic. We note that products such as computing devices, at-home fitness equipments and household appliances have been gaining popularity, as they help in making work-from-home and stay-at-home practices more convenient. In its last earnings call, management highlighted that sales during the first few weeks of November were solid, owing to the launch of new gaming consoles from Sony and Microsoft.

Additionally, Best Buy’s strong online presence is likely to have remained an upside during the quarter in review. In this context, the company’s well-chalked delivery systems have been a significant upside. In fact, almost all its stores offer same-day delivery services. The company has been on track with adding new functionalities to its curbside pickup services. Such prudent measures are likely to have boosted Best Buy’s online sales during the fourth quarter. The company has also been expanding its advisory functions, which includes guiding customers to find out the right technology solutions and provide free in-home or in-store consultations. Such efforts along with efficient programs like Total Tech Support are likely to have aided the company’s performance in the fourth quarter.

However, we cannot ignore the concerns surrounding rising expenses that might have put some pressure on margins. The company is incurring increased supply chain costs along with higher incentive compensation and other variable expenses.

Best Buy Co., Inc. Price, Consensus and EPS Surprise

 

Best Buy Co., Inc. Price, Consensus and EPS Surprise

Best Buy Co., Inc. price-consensus-eps-surprise-chart | Best Buy Co., Inc. Quote

 

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Best Buy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Best Buy currently carries a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Target Corporation (TGT - Free Report) currently has an Earnings ESP of +9.79% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar Tree, Inc. (DLTR - Free Report) currently has an Earnings ESP of +1.94% and a Zacks Rank #2.

Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +5.29% and a Zacks Rank #3, at present.

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