What's going on?
After reporting better-than-expected results on Tuesday, Best Buy won the star prize: the consumer electronics retailer’s shares rose over 10% to hit an all-time high.
What does this mean?
US staple Best Buy didn’t just report strong sales, it raised its forecast for the upcoming holiday season – despite the looming threat of tariffs on consumer electronics made in China. The company buys about 60% of its goods from the People’s Republic at the moment, but that might change next year as companies move their manufacturing away from the trade-warring country (tweet this).
Best Buy appointed a new CEO earlier this year, whose strategy of expanding into new areas – like healthcare – seems to have offset falling sales in consumer electronics. The retailer’s now selling goods ranging from fitness machines to in-home safety sensors for seniors (potentially a smart decision, considering the US’s aging population). And aside from hawking plain old goods, it’s expanded into services – like repairs and tech support – too.
Why should I care?
The bigger picture: How not to get Amazoned.
Big box retailers like Best Buy, Target, and Walmart seem to be successfully fending off Amazon, primarily by finding more ways to get their online orders delivered quicksmart. Best Buy, for example, has started to offer free next-day delivery, as well as a one-hour in-store pickup service. The plan seems to be paying off: Best Buy’s online sales grew 15% last quarter.
Zooming out: Big Dick’s energy.
Dick’s Sporting Goods seems to have its deliveries sorted too: the US retailer reported robust results on Tuesday, largely driven by its online offerings. Dick’s sales beat analysts’ predictions, and the firm – just like Target and Walmart in their earnings updates ‒ raised its expectations for the holiday season, sending its shares up 18%.