What's going on?
Go go better-than-expected earnings: Best Buy reported strong quarterly results earlier this week.
What does this mean?
Lockdowns might be over, but Best Buy’s shoppers were still sprucing up their homes with home theaters and kitchen appliances last quarter. That pushed up revenue from US stores that have been open for a year or more, but online shopping was still very much in favor: Best Buy’s online sales were over double what they were before the pandemic set in. That helped the retail giant boost its profit by a better-than-expected 28% compared to the same time last year. The company’s finding ways to keep customers coming back too: it reckons its new fixed-cost membership program – which offers perks like ongoing tech support – will help it stand out from its rivals going forward.
Why should I care?
The bigger picture: It’s too good to be true.
Investors weren’t best pleased, mind you: they sent the company’s shares down 12% after the announcement. Last quarter’s revenue growth was, after all, a big drop from the quarters before, which might be a sign that shoppers have had their fill of big, one-off electronics splurges. Throw in rising costs from shipping and shortages, and things don’t look great for Best Buy’s bottom line in the next few months.
Zooming out: Let there be oil.
At least the US has a plan to help manage those shipping costs: the country announced plans on Tuesday to release some of its oil stockpiles alongside China, Japan, India, South Korea, and the UK – a move that’ll ramp up the supply of the slippery elixir (tweet this). They’re all hoping it’ll help limit the rapid rise of the oil price, which – given its necessity for almost every industry – could put a dent in the global recovery.