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Reasons Why Best Buy (BBY) Should be in Your Portfolio Now
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Best Buy Co., Inc. (BBY - Free Report) is well poised for growth courtesy of its lucrative membership program, growth investments, robust omnichannel capabilities and shareholder-friendly policies. The company is constantly conducting various tests and pilots to become a more customer-centric, digitally focused and efficient company.
The Richfield, MN-based company belongs to the Zacks Retail - Consumer Electronics industry, which comes under the ambit of the Zacks Retail-Wholesale sector. It has a $14 billion market capitalization and currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that make investing in this company a wise choice at the moment.
Best Buy remains focused on making significant investments in stores and improving customer experiences. The company remains on track to deliver the fiscal 2024 store plans, including the closure of 20-30 large format stores and the implementation of eight Experience store remodels, as well as opening around 5 additional outlet stores. It has also been making investments in boosting its technology capabilities, such as data and analytics and cloud migration, to drive scale and operational efficiency.
The company focuses on improving its digital capabilities, including boosting its omni-channel services, such as buy online, pickup in store services. Its consultation service, which supports customers with personalized tech needs, has been gaining traction. In fiscal 2023, BBY's digital sales accounted for 33% of the domestic revenues compared with 19% in fiscal 2020.
Best Buy’s membership program currently offers three levels: My Best Buy, My Best Buy Plus and My Best Buy Total. My Best Buy remains its free tier plan for customers looking for convenience, including free shipping with no minimum purchase and gains connected with a member account. The company’s My Best Buy Plus is the latest membership plan for customers looking for value and access. For $49.99 per year, customers get everything, including My Best Buy offers with exciting prices and access to product releases.
My Best Buy Total is a membership plan designed for customers looking for protection and support. This tier is an evolution of the company’s Totaltech offer at $179.99 per year. BBY’s optimization efforts in several areas, including the membership program, health initiatives and the impacts of promotions, are expected to expand its gross margin by 60 basis points year over year in fiscal 2024.
Despite the positives, Best Buy has been witnessing soft sales across several categories, including appliances, home theater, computing and mobile phones. For the balance of the fiscal year, management expects the macroeconomic environment to continue affecting the demand environment.
Image Source: Zacks Investment Research
The stock has lost 6.4% in the past year compared with the industry’s decline of 25.1%.
Other Stocks to Consider
Here, we have highlighted three other top-ranked stocks from the same space.
American Eagle Outfitters (AEO - Free Report) , a retailer of casual apparel, accessories and footwear, currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS indicates an increase of 2.2% and 34%, respectively, from the year-ago reported figures. AEO delivered an average earnings surprise of 43.2% in the last four quarters.
GameStop (GME - Free Report) sports a Zacks Rank #1 at present. The Zacks Consensus Estimate for GME’s current fiscal year EPS implies growth of 88.2%, year over year. It delivered a trailing four-quarter earnings surprise of 72.7%, on average.
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer, currently carries a Zacks Rank #2. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 10.1% and 1,648%, respectively, from the year-ago reported figures. ANF has a trailing four-quarter earnings surprise of 724.8%, on average.
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Reasons Why Best Buy (BBY) Should be in Your Portfolio Now
Best Buy Co., Inc. (BBY - Free Report) is well poised for growth courtesy of its lucrative membership program, growth investments, robust omnichannel capabilities and shareholder-friendly policies. The company is constantly conducting various tests and pilots to become a more customer-centric, digitally focused and efficient company.
The Richfield, MN-based company belongs to the Zacks Retail - Consumer Electronics industry, which comes under the ambit of the Zacks Retail-Wholesale sector. It has a $14 billion market capitalization and currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that make investing in this company a wise choice at the moment.
Best Buy remains focused on making significant investments in stores and improving customer experiences. The company remains on track to deliver the fiscal 2024 store plans, including the closure of 20-30 large format stores and the implementation of eight Experience store remodels, as well as opening around 5 additional outlet stores. It has also been making investments in boosting its technology capabilities, such as data and analytics and cloud migration, to drive scale and operational efficiency.
The company focuses on improving its digital capabilities, including boosting its omni-channel services, such as buy online, pickup in store services. Its consultation service, which supports customers with personalized tech needs, has been gaining traction. In fiscal 2023, BBY's digital sales accounted for 33% of the domestic revenues compared with 19% in fiscal 2020.
Best Buy’s membership program currently offers three levels: My Best Buy, My Best Buy Plus and My Best Buy Total. My Best Buy remains its free tier plan for customers looking for convenience, including free shipping with no minimum purchase and gains connected with a member account. The company’s My Best Buy Plus is the latest membership plan for customers looking for value and access. For $49.99 per year, customers get everything, including My Best Buy offers with exciting prices and access to product releases.
My Best Buy Total is a membership plan designed for customers looking for protection and support. This tier is an evolution of the company’s Totaltech offer at $179.99 per year. BBY’s optimization efforts in several areas, including the membership program, health initiatives and the impacts of promotions, are expected to expand its gross margin by 60 basis points year over year in fiscal 2024.
Despite the positives, Best Buy has been witnessing soft sales across several categories, including appliances, home theater, computing and mobile phones. For the balance of the fiscal year, management expects the macroeconomic environment to continue affecting the demand environment.
Image Source: Zacks Investment Research
The stock has lost 6.4% in the past year compared with the industry’s decline of 25.1%.
Other Stocks to Consider
Here, we have highlighted three other top-ranked stocks from the same space.
American Eagle Outfitters (AEO - Free Report) , a retailer of casual apparel, accessories and footwear, currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS indicates an increase of 2.2% and 34%, respectively, from the year-ago reported figures. AEO delivered an average earnings surprise of 43.2% in the last four quarters.
GameStop (GME - Free Report) sports a Zacks Rank #1 at present. The Zacks Consensus Estimate for GME’s current fiscal year EPS implies growth of 88.2%, year over year. It delivered a trailing four-quarter earnings surprise of 72.7%, on average.
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer, currently carries a Zacks Rank #2. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 10.1% and 1,648%, respectively, from the year-ago reported figures. ANF has a trailing four-quarter earnings surprise of 724.8%, on average.