Best Buy (BBY) 2020 Q4 Earnings Report

Best Buy Co Inc. (NYSE:BBY) has been around for nearly 55 years. It started as a seller of stereo equipment for homes and cars and diversified its product portfolio over the years. Today, it is a leading retailer of consumer electronics in the U.S., selling PCs, laptops, smartphones, home office products, and much more.

The company did well in 2020 in terms of generating revenue, as demand for electronics sharply rose during the pandemic. An increasing number of people started working from home, fueling the demand for electronic products such as laptops and webcams. Moreover, many purchased entertainment products like gaming consoles to spend quality time during the lockdown restrictions in place.

Being the leading player in the consumer electronics space, Best Buy befitted from the trend. However, BBY stock did not gain much value last year, despite achieving strong revenue growth. BBY share price advanced about 14 percent during 2020.

The company on Thursday announced mixed financial results for the fourth quarter. It reported earnings of $3.10 per share for the three months ended January 30, as compared to $2.84 per share in the same period last year. Its adjusted earnings of $3.48 per share beat analysts’ average estimate of $3.47 per share.

However, the revenue of $16.94 billion failed to meet the consensus forecast of $17.20 billion. Comparable sales increased 12.6 percent in the quarter but fell short of a 14.4 percent rise forecasted by analysts. On the bright side, comparable online sales in Q4 skyrocketed 89.3 percent on a year-over-year basis.

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Speaking on the financial outlook, CFO Matt Bilunas said in a statement, “We are confident in our long-term strategic direction and believe we are investing from a position of strength. As it relates to FY22 specifically, the demand for technology remains at elevated levels as we start the year. However, there is a high level of uncertainty related to the impacts of the COVID-19 pandemic that makes it difficult to predict how sustainable these trends will be, including, but not limited to, the timing of administration of the vaccine and the subsequent impact on customer demand and shopping patterns, as well as potential government stimulus actions.”

Best Buy shares fell more than 9 percent on Thursday following Q4 results. The stock continued its downward trajectory Friday, slipped more than 2 percent in the mid-day trading.

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