Best Buy Co. Inc. says it’s now serving 1
million seniors through its health offerings, with the goal of serving 5 million
by fiscal 2025.
Best Buy’s BBY, -1.55%
health initiatives aim to help seniors stay in their homes, which they say
reduces health-care costs and stress for families.
“Today, most of the seniors we serve are
utilizing easy-to-use mobile phone products and connected devices that are
tailored for seniors and come with a range of relevant services,” said Best Buy
Chief Executive Corie Barry on the earnings call, according to a FactSet
transcript.
Best Buy is also providing a “Five-Star
Service” that connects customers with U.S.-based agents who can send emergency
professionals, act as a concierge and more.
Best Buy has been making inroads into the
health space through its GreatCall devices and services and the acquisition of
Critical Signal Technologies, a monitoring business that has a supplemental
benefit covered by the Medicare Advantage plan.
In addition, Best Buy has added a practicing
emergency doctor, Dr. Daniel Grossman, as chief medical officer.
Besides the continued focus on health
offerings, Best Buy also discussed fulfillment and delivery expansion, with New
York prominent in the rollout and trial of new services.
During the quarter the company opened 175
alternate pickup locations at UPS Stores and CVS Health locations in New York,
and curbside pickup is rolling out in New York. And the retailer is adding
in-home advisors in order to capitalize on what the company sees as an
“untapped opportunity” in the market.
In New York, Los Angeles and Chicago, online
customers can order until 8 p.m. and receive their purchase for free the next
day.
And nationally, the company has added 100
in-home advisors, with a total of 720 at the end of the quarter.
Best Buy reported third-quarter earnings and revenue that
beat expectations. Same-store sales growth of 1.7% also beat the FactSet
consensus with the company, with appliances, tablets, headphones and computing
the drivers.
The results sent shares soaring nearly 10% in
Tuesday trading.
Despite the good news, GlobalData Retail also
identifies challenges, including a cautious consumer spending environment.
“Our data show that consumers are more
reticent to buy big-ticket items now than they were at the start of this year,”
wrote Neil Saunders, managing director at GlobalData.
Still, Best Buy has an advantage, thanks to a
strong mix of stores and e-commerce, with data showing that customers who see
an item in person are more likely to make the purchase.
Wells Fargo thinks tariffs could be an issue
going forward.
“Q4 will be telling with six fewer holiday
selling days, a ramping promotional environment and tariffs just beginning to
enter the gross margin line,” analysts led by Zachary Fadem wrote. “Looking
further ahead, we see reason for fiscal 2021 optimism on an improving product
lineup (5G, 8K TV, gaming consoles), and easing compares, but in our view,
tariffs remain the single biggest sticking point for shares today.”
Wells Fargo rates Best Buy stock market
perform with an $85 price target, up from $65.
Best Buy shares are up 51.8% for the year to
date, outpacing the S&P 500 index SPX, +0.40% ,
which is up 25.8% for the period.
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