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Best Buy's holiday clout could be diminishing - but there's still time left

1 month ago by Jon Marino in Consumer, Retail

Best Buy ($NYSE:BBY) is seeing some of its alternative data begin to lose steam as it heads into the holiday season. But whether it is a sign of slowing engagement or growing efficiency, remains to be seen. The company will report earnings November 26, and analysts tracked by Zacks Investment Research are expecting EPS of $0.93. 

Year-over-year, it's clear that Best Buy is bringing on fewer holiday retail staff to support sales. In each of the last three years, it increased in the three to four-fold range, the number of retail and seasonal staff Best Buy seeks to employ - but, in each year, it has declined. From 2017 to 2018, peak holiday hiring slid -16%; from 2018's peak to 2019, it fell another 25%, according to the data. 

However, it may not be a terrible sign - Best Buy, over the last three years, also reduced its footprint in both small-format and big-box stores, according to statements in federal filings. 

Another gauge we can use to track a company's health relates to the number of products it carries - if and when a retailer sees a steep drop-off in products (which, by the chart above, we can see Best Buy has not experienced), it's a sign that some product vendors may be tightening up on credit, or even demanding payment up-front. And while Best Buy's product count by vendor certainly isn't showing any signals of dire data - it does represent a slight decline, of less than 1% from 2019 peaks. 

Our very last chart reflects what happens to a retail brand that's truly in decline - Barneys ($BARNEYS) filed for bankruptcy earlier this year, and prior to that, the total number of products fell nearly 20% as vendor partners rightly worried, leading up to its Chapter 11 filing. 

About the Data: 

Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

Further Reading: 

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Jon Marino

Jon Marino is Thinknum's finance editor, covering the impacts of alternative data on public companies and investors. Prior to joining Thinknum, Jon worked in the ...

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