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New data shows Best Buy may focus on high-end in order to survive

1 month ago by Jon Marino in Earnings

Best Buy ($NASDAQ:BBY) shares are tracing all-time highs - and analysts have a rosy outlook for the stock. 

Analysts tracked by Zacks Investment Research are expecting EPS $2.76 per share when Best Buy announces results on February 27. Over the last 12 months, shares are up an impressive 39%. But, the tale of Best Buy appears to be one of a company that's hiring less, and engaging consumer less - and dialing up discounts when it can get consumers' attention. 

Our first chart tells us two things about Best Buy - the first, being that it is hiring at a peak clip less and less every year, and second, that when it reduces job postings, it needs fewer and fewer staffers after the holidays each year. Particularly worrisome - looking at several years' data before 2020 - is that its trajectory of job postings fell off in early February. Could Best Buy be hiring less because it's figured out to digitally-optimize its sales? It's absolutely possible. 

Our second chart tracks Best Buy's Facebook ($NASDAQ:FB) Talking About Count. Similar to its job postings chart, Best Buy's social chatter has seen better days, in prior years.

And then there's our final chart - which illustrates some clever pricing and discounting activity. On one hand, Best Buy shoppers may be in the electronics aisle thinking, 'I've never seen an online discount at Best Buy so generous!' - and, in a sense, they'd be correct. 

But, that's because Best Buy's average online price keeps rising, at the same time it's dialing up online discounts. Product pricing data sets reveal a spike in median pricing (not shown), as well as a drop in the total number of products for sale - meaning that Best Buy may have eliminated some items for sale that are at the lower end of the price scale.

But, it's also possible that Best Buy simply began selling more high-priced products - a wholly plausible scenario, given that it's selling TVs with price tags creeping within a penny of five-figure territory. 

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. 

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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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