Retail

What to Look for in Best Buy Earnings

Chris Lange

Published: May 23, 2016 12:40 pm

Last Updated: January 13, 2020 7:41 am

Best Buy Co. Inc. (NYSE: BBY) is scheduled to release its fiscal first-quarter earnings report before the markets open on Tuesday. The consensus estimates call for $0.35 in earnings per share (EPS) on $8.29 billion in revenue. In the same period of last year, the specialty retailer posted EPS of $0.37 and $8.56 billion in revenue.

This company offers sharp discounts on some of the items sold at BestBuy.com. The consumer electronics retailer may do this for several reasons. Among them are clearance of inventory that would not sell quickly without discounts, a method to bring in customers who might buy other items on which Best Buy makes larger margins, or a means to keep pace with online sales by Amazon.com.

About two years ago, Facebook Inc. (NASDAQ: FB) paid a reported $2 billion to acquire virtual reality (VR) headset maker Oculus Rift. And despite delays getting the product out the door, buyers will be able to attend an in-store demo and, if they’re extremely lucky, purchase one of a limited number of the headsets that debuted at 48 Best Buy stores earlier this month.

A few analysts weighed in on Best Buy prior to the release of the earnings report:

• Raymond James reiterated a Buy rating.
• Jefferies reiterated a Buy rating with a $39 price target.
• Deutsche Bank reiterated a Buy rating with a $38 price target.
• Barclays initiated coverage with an Overweight rating and a $45 price target.
• Guggenheim initiated coverage with a $45 price target.

So far in 2016, Best Buy has outperformed the broad markets, with the stock up nearly 10%. Over the past 52 weeks. the stock is actually down about 4%.

Shares of Best Buy were trading up 2.1% at $33.03 on Monday, with a consensus analyst price target of $34.44 and a 52-week trading range of $25.31 to $39.10.