Best Buy is ready for Black Friday
(CNN) — Only a handful of old-school retailers are thriving in the face of Amazon today. Best Buy continues to be one of those companies and is set for a strong holiday stretch.
Best Buy said Tuesday that sales at stores open for at least one year increased by 1.7% during its most recent quarter, extending its consecutive sales growth streak to nearly three years.
Shoppers dished out on appliances, headphones and tablets at Best Buy last quarter, and the company also got a boost from its services business. The company has identified services like an annual tech support membership and Geek Squad installations and repairs as major opportunities for growth in the future.
Best Buy beat investors’ profit expectations during the quarter and raised its guidance heading into the holidays.
The holiday season is critical for all retailers, but especially for an electronics chain: More than one-third of Best Buy’s sales came during its final quarter last year.
“Best Buy is well positioned to continue as one of the top performers in retail, with this holiday season set up for it to continue to build momentum,” Moody’s analyst Charlie O’Shea said in an email to clients Tuesday.
Best Buy’s stock rallied 5% during early trading Tuesday. Heading into Tuesday, shares of Best Buy have increased 40% this year.
The company has steered through upheaval in retail by beefing up customer service and turning stores into modern-looking showrooms. Best Buy also lowered prices and built out an e-commerce infrastructure before many other retailers. Around 15% of Best Buy’s sales today are online, a much larger share than Walmart or Target.
“It is more than holding its own against the likes of Walmart, Amazon, and Target,” O’Shea said.
Those three retailers are expecting a strong holiday shopping season, underpinned by low unemployment and rising wages. So is Best Buy.
Best Buy plans to win shoppers this holiday by offering free next-day shipping on some merchandise and giving customers the option to quickly pick up their online orders in stores. Best Buy uses its stores as warehouses to ship goods to customers.
“We are excited about our holiday plans,” CEO Corie Barry said in a statement. This will be Best Buy’s first holiday under Barry, a veteran Best Buy executive who took over as chief executive earlier this year.