During the May 24, 2011 conference call Best Buy will tell investors how they see the first quarter of 2011 shaking out. During the first quarter Best Buy will see an increase in sales due to the fact that Memorial Day is one of the busiest shopping days of the year along with Labor Day, President’s Day, July 4th and, of course, Black Friday. While 2011 Memorial Day sales numbers are not going to push Best Buy assets to a new all time high they should help to propel the company to a new Q1 high.
In Q1 of 2010, Best Buy reported total assets of $17.96 billion which was an increase of 23% over the previous year. A 23% increase this year could go a long way to help the Best Buy stock which has taken a hit since mid December when sales numbers did not come in as high as expected. Many analysts and CNBC contributors have documented the fact that Amazon.com continues to take marketshare from brick and mortar retails; especially those retailers who are technology based.
Some of the most popular items that are purchased at Best Buy include HD TVs, laptop computers and Apple products such as the iPad and iPod. While the sales numbers continue to grow for popular tech merchandise it is the case that many American shoppers are resorting to the Internet, companies such as Amazon.com and Overstock.com, to get some of the auxiliary items that they used to pick up at Best Buy.
If Best Buy wants to see a stock price near its all time high they are going to have to put total assets to well over $23 billion later in 2011. It will take some great marketing strategies to go along with strong online sales to have any opportunity to continue to produce the stellar growth numbers that investors have become accustom to. With Americans looking to save money it will be interesting to see what Best Buy has to offer in the next few quarters as far as low prices on merchandise and if they can retain a high profit margin.
Author: Jerome Watson
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