Get The Ticker Tape delivered right to your inbox.

X
Trading

Earnings: Are Consumers Spending on Electronics at BBY?

Print
May 23, 2016
Best buy consumer spending data in the electronics market.

Best Buy (BBY) opens its Q1 books before the bell Tuesday and, like many other retailers, faces increasing competition from online retailers. Can BBY counter the competition?

In the midst of a multi-year upgrade of operations and cost savings, BBY has turned in better-than-expected results over the last 13 quarters.

Many analysts reporting to Thomson Reuters are estimating a per-share profit of $0.35, a 5.4% decline from year-ago results. Revenue is expected to fall to $8.29 billion, off 3.1%.

Some analysts are likely monitoring how BBY is progressing in its efforts to cut costs and boost same-store sales. Last year, the company announced a $400 million cost-savings plan expected to run for three years. BBY has stepped up its store-within-a-store experiences with its Magnolia Design Center as well as its Pacific Kitchen & Home stores. It has also been pushing its connected-home segment with new products.

Short-term options traders have priced in a potential 5.5% share price move in either direction around the earnings release, according to the Market Maker Move indicator on the thinkorswim® platform by TD Ameritrade.

Ahead of earnings, many options traders were active at the 30- and 31-strike puts. On the call side, there was no one strike that stood out with active trading. The implied volatility is at the 68th percentile. (Please remember past performance is no guarantee of future results.)

Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time.

FIGURE 1: BEST BUY’S VOLATILE RANGE.

Since bottoming in mid-January, BBY stock has rallied by more than 25%. Chart source: thinkorswim® by TD Ameritrade.  Data source: Standard & Poor’s. Not a recommendation. For illustrative purposes only. Past performance does not guarantee future results.

Scroll to Top