Will Best Buy Q1 Earnings Rise Above Low Expectations?

Best Buy Co. Inc. (NYSE: BBY) is scheduled to release its fiscal first-quarter financial results before the opening bell on Thursday. Analysts are calling for $0.60 in earnings per share (EPS) and $8.35 billion in revenue. The same period of last year reportedly had $1.02 in EPS and $9.14 billion in revenue.

The company previously issued guidance for the first quarter of EPS in the range of $1.00 to $1.05, enterprise revenue between $9.1 billion and $9.2 billion, and comparable sales growth of flat to up 1.0%. However, Best Buy withdrew all guidance for the 2021 fiscal year back in March.

During the fiscal fourth quarter, enterprise comparable sales increased 3.2% year over year, compared with an increase of 3.0% last year. This consists of domestic comparable sales increasing 3.4%, domestic comparable online sales increasing 18.7% and international comparable sales increasing 1.6%.

At that time, the largest comparable sales growth drivers were headphones, computing, appliances, mobile phones and tablets. These drivers were partially offset by declines in the gaming category.

Also, domestic revenue totaled $13.85 billion, with online revenue making up about $3.52 billion of these sales. International revenues were $1.35 billion.

Given the great changes in conditions since then, it’s no surprise that Wall Street is somewhat wary. Yet, excluding Wednesday’s move, Best Buy stock had outperformed the S&P 500 and Dow Jones industrial average with a decline of about 5% year to date. In the past 52 weeks, the share price was up 21%.

A few analysts weighed in on Best Buy ahead of the report:

  • CFRA has a Buy rating and a $90 price target.
  • UBS has a Neutral rating with an $80 price target.
  • Telsey Advisory Group rates it as Outperform with a $90 target.
  • Wells Fargo has an Equal Weight rating and a $75 price target.
  • Nomura has a Buy rating with an $85 price target.

Best Buy stock traded up about 1% at $84.30 on Wednesday, in a 52-week range of $48.11 to $91.99. The consensus price target is $80.22.