Best Buy Mobile and Online Sales Drive BestBuy’s Q1 Revenues
Best Buy (NYSE:BBY) reported better than expected results for Q1 2012. BestBuy Mobile witnessed an impressive 25% growth in the quarter and same store sales were down 1.7%, both of which were better than what many analysts had expected. [1] Best Buy competes with general retailers like Wal-Mart (NYSE:WMT) and Costco (NASDAQ:COST) as well as other specialty retailers like Radio Shack (NYSE:RSH) and GameStop (NYSE:GME). Our price estimate for Best Buy’s stock stands near $40, a roughly 30% premium to market price.
A Look at Last Quarter
BestBuy Mobile, Best Buy’s online revenue and subscriptions as well its other “connection” registered growth of 28%, 12% and 20% respectively.
Trefis expects BestBuy Mobile stores to witness continued growth in coming years. This concept has proven successful since its inception and has created a shopping mall atmosphere for its consumers. The company plans to open around 150 stores in 2011 alone. Apart from selling mobile phones, these stores also sell other forms of mobile technologies such as notebook computers, slingbox and hand-held Internet devices.
However, higher transportation costs, increased promotions and industry-wide supply interruptions of digital imaging products due to the earthquake and tsunami in Japan affected BestBuy’s performance this quarter.
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See our full analysis for Best Buy
Notes:- See: Best Buy FY Q1 Tops Street Estimates; Shares Rally, June 14, 2011 [↩]