Best Buy Co., Inc. BBY plans to accomplish enterprise revenues of $50 billion annually by fiscal 2025. Its initiatives like “Building the New Blue” program, expansion of omni-channel capabilities and reinforcing foothold in the healthcare technology space are likely to fuel higher revenues. “Building the New Blue” initiative aims to pursue growth opportunities, better execution in key areas, cost containment, and investing in people and systems. Moreover, the company has been extensively investing to upgrade operations and strengthening partnerships with vendors. Impressively, the Richfield, MN-based company’s shares have gained 36.8% in the past six months, outperforming the S&P 500’s 20.7% rally. Meanwhile, the industry registered growth of 33.4%.
“Building the New Blue’’ Plan Best Buy remains on track with the next phase of its “Building the New Blue” program called “Building the New Blue: Chapter Two”. In this regard, management targets $600 million of cost reduction by fiscal 2021. It also intends to reduce costs by $1 billion by fiscal 2025. This is likely to increase productivity and efficiency, and in turn, boost the company’s profits. The acquisitions that highlight Best Buy’s efforts to make significant headway into the healthcare technology business include GreatCall and Critical Signal Technologies. While GreatCall is a major connected health technology company, Critical Signal Technologies provides personal emergency response systems and telehealth monitoring services for seniors at home. The company also acquired BioSensics, a provider of wearable sensor technologies for clinical research and medical applications. These buyouts are likely to reinforce Best Buy’s footprint in the healthcare space and deliver incremental revenues. Meanwhile, the consumer electronics retailer has been progressing well with programs like Total Tech Support, which provides support for fixing computers, laptops, appliances, smart home devices and connected devices. Further, Best Buy expanded its In-Home Advisor program to the core U.S. markets. As part of the program, advisors guide customers to find out the right technology solutions and provide free in-home consultations. Wrapping Up Despite the aforesaid strengths, Best Buy is not spared to industry headwinds such as aggressive promotional strategies, intense competition and adverse foreign currency risks. Also, sluggishness in its international segment for a while is concerning. Nonetheless, Best Buy’s “Building the New Blue’’ initiative coupled with other endeavors should keep driving the stock. The company currently has a Zacks Rank #2 (Buy) and a VGM Score of A, which further increase its odds of success. More Key Picks in the Broader Retail Space Chico's FAS, Inc. CHS has an impressive long-term earnings growth rate of 15% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Stitch Fix, Inc. SFIX, also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 15%. Nordstrom, Inc. ( JWN Quick Quote JWN - Free Report) has an expected long-term earnings growth rate of 6%. It currently flaunts Zacks Rank of 2. Looking for Stocks with Skyrocketing Upside? Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>