These days, Best Buy celebrates its 50th anniversary with big discounts and an ongoing 50-hour sale spree with deals you’ll only see on Black Friday nights. But analysts keep their fingers crossed hoping that the consumer electronics retailer makes it through its 60th anniversary too.
Best Buy, which opened its first store on Aug. 22, 1966, thought that the best way of celebrating a golden anniversary was to organize a huge sale session this month. The company’s stock saw some gains this summer, but shares are still trading 25 percent lower than they did in 2013 during its all-time peak.
While Best Buy is faring slightly better than its rivals on the stock market, analysts temper their excitement over the retailer’s growth prospects. Market analysts say that it would be a real challenge for the superstore to stay in the business another decade.
The company will report its Q4 results on Tuesday, but stakeholders don’t expect nice results. Earlier this year, the firm reported up to $8.45 billion in revenue, which is a slight loss in the yearly revenue.
Best Buy’s stock didn’t see any massive gains either, despite the company’s huge stock buyback efforts last year. The retailer hopes to see at least a $ 0.38 per share profit in 2016, a drop from last year’s $0.49 per share gain.
Analysts explained that the weak gains are due to the digital revolution that has been sweeping the nation’s brick-and-mortar retailers in recent years. Best Buy is trying to cope with the unbeatable online discounts and convenience by focusing on sale volume and sales, but it needs to do much more to remain competitive.
For instance, you can buy a nice 65-inch Samsung 4K UHD TV from the store and save $400 until Saturday night, when the 50-hour sale campaign ends. But analysts noted that after a customer buys this TV set, it is highly unlikely that he or she would ever return to Best Buy to buy 4k media content when they have Netflix and other video streaming services at their fingertip.
Moreover, you can purchase a pair of Beats Studio headphones with an $180 discount, but you won’t return to the store to buy an audio CD because you can get all the music files you need and more from online stores. And the list can continue.
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