Best Buy shares jumped 12% to a new all-time high on Tuesday after the electronics retailer issued a quarterly report card that showed it is poised to be a big winner in this holiday season’s shopping wars.
The company said U.S. Comparable sales jumped a better-than-expected 2%, led by strong sales of appliances (thank you, Sears!), headphones, tablets and services, prompting it to raise its full year profit forecast. What’s more, the chain once thought to mortally threatened by Amazon, reported 15% growth in online sales.
“We are excited about our holiday plans,” said Corie Barry, who took the CEO reins earlier this year. “Our teams have once again put together a best-in-class assortment, prepared an amazing set of deals and ensured we have great inventory availability.”
In its previous quarterly update with investors, Best Buy had issued a warning “general uncertainty” surrounding parts of its business and worries about tariffs, but on Tuesday, executives touted “improved expectations” for the current quarter, which includes the pivotal holiday season. The National Retail Federation says industry sales should grow about 4% or so this season.
Best Buy has countered Amazon encroachment on its territory by equipping its stores for faster delivery and order retrieval. On Tuesday it announced it was taking that another step further: the chain is trying out curbside pickup and order-pickup locations at some CVS drugstores and UPS outlets in New York City. Barry told reporters on a briefing Best Buy would look to expand the program.
The company has said shoppers will be able to get thousands of items (excluding TV’s and appliances) by the next day to about 99% of its customers this holiday season as it looks to meet Amazon’s challenge.
But Best Buy is beating the odds by successfully updating its business model to become less dependent on consumer electronics like games, and consoles. That is a wise strategy long term: analysts cite a challenging holiday season for consumer electronics given the paucity of must-have items beyond a new Apple phone. So Best Buy is branching out further into newer areas like in-home services such as WiFi installation and, counterintuitively, healthcare.
Indeed, grabbing a sizable share of the healthcare tech industry is key to Barry’s goal of getting Best Buy’s annual revenue from about $43 billion in sales now to $50 billion in 2025, a plan she unveiled to Wall Street in September. Best Buy is planning to be providing health monitoring services to 5 million seniors within five years. Earlier this year, it acquired Critical Signal Technologies, which provides personal emergency response systems.
GlobalDate Retail managing director Neil Saunders in a note lauded Best Buy for having “been able to secure growth regardless mainly because of its strong focus on staple electronics such as televisions and appliances, and its authority in newer categories like smart home and health monitoring technology.”
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