Back to top

Image: Bigstock

Here's How Best Buy (BBY) is Poised Ahead of Q1 Earnings

Read MoreHide Full Article

Best Buy Co., Inc. (BBY - Free Report) is scheduled to report first-quarter fiscal 2021 results on May 21, before the opening bell. Notably, the company has a trailing four-quarter positive earnings surprise of 9.7%, on average.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 66 cents, which suggests a decline more than 35% from $1.02 earned in the year-ago quarter. Moreover, the consensus mark for quarterly revenues is pegged at $8,342 million. The estimate indicates a fall of around 9% from the year-ago quarter’s tally.

Best Buy Co., Inc. Price and EPS Surprise

Best Buy Co., Inc. Price and EPS Surprise

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

Key Things to Note

Best Buy had withdrawn its guidance for first-quarter and fiscal 2021 in response to the rising uncertainties tied to the coronavirus pandemic. Moreover, the company drew the total amount of $1.25 billion under its revolving credit facility and suspended share buybacks. Meanwhile, all in-home installation and repair work is suspended for the time being, while in-home consultations are being conducted virtually. However, in the latest release, management informed that it is looking to resume in-home services in the near term and re-open stores when it is safe.

Further, the Zacks Consensus Estimate for first-quarter revenues at the company’s Domestic and International segments stands at $7,861 million and $622 million, suggesting respective declines of 7.3% and 5.9%. Also, the consensus mark for the Domestic and International comparable sales indicates a year-over-year decline of 7.3% and 7%, respectively.

Nevertheless, Best Buy has been enhancing its curbside service, enabling customers to continue purchasing items online or via app. In its latest release, Best Buy issued sales data. Impressively, the company was able to retain about 70% of sales compared to last fiscal owing to its robust curbside service model while all its stores are shuttered. Its domestic online sales grew more than 250%. Although sales for the nine-week period ending Apr 4 fell nearly 5% year over year, quarterly sales through Mar 20 surpassed expectations and increased roughly 4%. In the eight-day period ending Mar 20, the company’s top line rose 25% on higher demand for products that people require to work or learn from home. Although the company is still witnessing increasing demand for these as well gaming products, sales tumbled nearly 30% year over year from Mar 21 through Apr 11.

What Our Zacks Model Says

Our proven model does not 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Best Buy carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Kroger (KR - Free Report) has an Earnings ESP of +4.52% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General (DG - Free Report) has an Earnings ESP of +1.25% and a Zacks Rank #2.

Lowe's Companies (LOW - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
 
See their latest picks free >>