Best Buy Co., Inc. (NYSE:BBY) will be holding its fourth quarter earnings conference call for all interested parties on Thursday, February 27, 2014, at 8:00 a.m. ET.
Wall Street anticipates that the retailer will earn $1.01 per share for the quarter, which is $0.54 less than last year's profit of $1.55 per share. iStock expects BBY to top Wall Street's consensus number. The iEstimate is $1.01, four cents more than expected.
Best Buy Co., Inc. operates as an e-commerce and physical retailer of consumer electronics in the United States, Europe, Canada, and China.
BBY has reported EPS five times since reorganizing in 2012. The electronics retailer has been on a roll, smoking the street view four consecutive quarters by an average of 66%, which works out to $0.11 per share more than forecast. Meanwhile, the lone miss was five quarters ago when BBY missed by $0.09.
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For the most part, Best Buy's share price has followed the side of the surprise. The bearish miss was accompanied by a decline of -23.30% in the three days surrounding the disappointing result. Three of the four bullish shares saw shares make gains of 13.9%, 13.9% and 0.50% while the stock ran in place once.
Given its track-record, being on the right side of the surprise has its benefits. Fortunately, Best Bet releases its nine-week holiday sales, which cover the first nine weeks of Q4, which means we need to take a stab at January figures.
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BBY generated revenue of $11.45 billion for the nine weeks ended January 4, 2014. Now analysts see total sales of $14.66 billion for the entire quarter, which is a difference of $3.21 billion.
Let's see if we can use Google Trends and last year's number to see if we can fill in the blind spot with a different result. First off, Best Buy's holiday sales for the first nine weeks of 2012 were $12.8 billion and $16.711 for the full quarter, leaving $3.91 billion from January 5, 2012 thorough the end of the quarter.
Year-over-year January Google Trends for the keyword "Best Buy" are down 6.9%. Apply the math and the calculator says… January 2013's sales after the 4th should be close to $3.46 billion. That would put total Q4 sales at $15 billion and above the current consensus, but not that far off of the highest estimate of $14.95 billion.
Now, just because sales might be stronger than anticipated, that doesn't mean profits will stray too far from the current consensus. Management has said "aggressive promotional pricing" impacted holiday revenue. In other words, deep-discounts are going to hit margins, but a heavier top-line should equal a few more cents than Wall Street's outlook.
Overall: Best Buy Co., Inc. (NYSE:BBY) has a decent chance to deliver a positive EPS and revenue surprise Thursday morning, which could lead to a positive price-response if history holds true to form.
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