Best Buy Co., Inc. ($BBY) Earnings (Q1 FY23)

 Best Buy Co., Inc. ($BBY) Earnings and Opinion:


Best Buy is a company in the Consumer Cyclical sector and operates in the Specialty Retail industry. The company retails technology products in the United States and Canada. Best Buy was founded in 1966 and is currently headquartered in Richfield, Minnesota. The company was first traded on the stock market in 1985.

Best Buy EPS and Revenue (Q1 FY23):

  • EPS of $1.57 beating expectations of $1.56
  • Revenue of $10.65B beating expectations of $10.43B
Best Buy Q1 Highlights:
  • Gross Profit % of 22.1
  • Revenue was down 8.5% Y/Y
  • EPS was down 29.6% Y/Y
  • Domestic online sales were down 14.9% Y/Y
  • International sales were down 1.4% Y/Y
Opinion:
Best Buy stock is currently trading lower after reporting earnings before the market opened this morning. The company was able to beat expectations on both the EPS and Revenue metrics. However it is the change in outlook and decrease in comparable sales over the year that is moving the stock lower. Best Buy pretty much lowered their guidance for every category for the rest of the fiscal year. They saw lower sales in this quarter due to supply chain issues as well as prices increasing and people not being able to afford their products as much as the past. This really hurts this retail company and can maybe predict some more suffering happening for them. With inflation not easing the way many expected, it could be possible for more expensive retail stores to continue to struggle for a little while longer. As in terms of the stock performance, Best Buy has suffered more than a 36% loss in the past 6 months. It is currently a couple dollars higher than the 52 week low. It is crazy to see such a solid retail company with a solid business model suffer this rough. It just goes to show you how much economic challenges affect things. The current valuations have the P/E ratio at 6.70 and P/S at 0.32. Both of these are screaming cheap right now, which may be a solid time to pick up the stock. However a couple of factors may play into this decision. Starting out with the biggest negative which would be the growth may be negative for this fiscal year. However, that is just for the short-term and things will have to return to normalcy at sometime in the future. Some of the positives overlaying this would be the return on equity at 64.52% and the Cash compared to debt is in a reasonable position. I really like this company after looking at the valuations and metrics. Although the outlook wasn't the sharpest, there is still plenty of upside with this stock for the future. I wouldn't pass up on this opportunity with Best Buy having a solid hold and foundation in the industry.

*Information from Best Buy, Yahoo Finance, Google, CMLVIZ

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