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Best Buy Stock: More Momentum with Q2 2019 Results?


Aug. 22 2018, Updated 1:20 p.m. ET

YTD rise in the stock

Best Buy (BBY) stock has risen 18.9% since the beginning of 2019. The stock has beaten the S&P 500, which has risen 7.1% as of August 21. Best Buy stock has increased 7.2% since it announced its results for the first fiscal quarter of 2019[1. The first fiscal quarter of 2019 ended on May 5] in May. Best Buy is scheduled to announce its results for the second fiscal quarter of 2019[2. The second fiscal quarter of 2019 ended on August 4] on August 28.

GameStop (GME) stock has declined 8.1% on a year-to-date basis, while Aaron’s (AAN) stock has risen 25.9% as of August 21.

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Recap of the first-quarter performance

Best Buy exceeded analysts’ revenue and earnings expectations for the first fiscal quarter of 2019 and generated strong year-over-year growth rates. However, the company’s margins declined in the first fiscal quarter and online sales growth decelerated.

Best Buy’s turnaround efforts have helped it deliver higher revenues for the last five consecutive quarters. The company is focusing on growth categories like smart home solutions. Best Buy is also trying to strengthen customer relationships through its services business.

On August 15, Best Buy announced the acquisition of GreatCall, a provider of connected health and personal emergency response services, for $800 million. Best Buy has been looking for growth opportunities in products and services that cater to the aging population.

The company launched its Assured Living service last year, which helps people check on older individuals’ health and safety. With annual revenues of over $300 million and more than 900,000 paying subscribers, the GreatCall acquisition is in line with Best Buy’s 2020 strategy.

Next, we’ll discuss analysts’ expectations for Best Buy’s second fiscal quarter revenues.


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