Best Buy’s (BBY) stock price rose 52% on a YTD (year-to-date) basis to $46.58 as of November 25, 2016. The consumer electronics specialty retailer outperformed the S&P 500 Index, which rose 10% on a YTD basis. Best Buy also outperformed other specialty retailers like GameStop (GME), Aaron’s (AAN), and Conn’s (CONN). As of November 25, the stock prices of GameStop, Aaron’s, and Conn’s rose -8.8%, 30.5%, and -46.2%, respectively, on a YTD basis.
Market’s reaction to recent results
Best Buy stock rose 13.7% on November 17 in reaction to the company’s impressive fiscal 3Q17 results. Fiscal 3Q17 ended on October 29, 2016. The company exceeded analysts’ revenue and earnings estimates for fiscal 3Q17. Best Buy was able to boost its revenue in 3Q17 due to several initiatives including the expansion of stores-within-stores under various merchandise categories in collaboration with key vendors. The company’s strong online sales growth was also a key growth driver in fiscal 3Q17.
Best Buy is among the top ten holdings of the SPDR S&P Retail ETF (XRT). It accounts for 1.4% of XRT. As of November 25, 2016, XRT rose 8.5% on a YTD basis.
In this series on Best Buy, we’ll discuss Best Buy’s sales and earnings performance in 3Q17. We’ll also discuss the expectations for 4Q17 and the fiscal year. We’ll focus on the company’s initiatives to improve its revenue and profitability. We’ll discuss analysts’ recommendations and the valuations for Best Buy stock in the final part of this series.
We’ll start with a discussion on the company’s revenue in the next part of this series.