In this segment of the Motley Fool Money radio show, host Chris Hill and Motley Fool Pro and Options' Jeff Fischer discuss how consumer electronics retailer Best Buy (NYSE:BBY) has finessed a legitimate revival in the face of the e-commerce onslaught. In this past quarter, gaming and mobile device sales were a big help, as was the (eventual) arrival of tax refunds. But there's a lot more to it.

A full transcript follows the video.

This video was recorded on May 26, 2017.

Chris Hill: More signs of life in the retail industry right now. Best Buy's first-quarter profits rose 33%. Jeff, I thought this would be a pretty good quarter. I didn't think it was going to be this good.

Jeff Fischer: The company is crediting gaming, strong gaming sales, mobile continues to be fairly strong, outside of tablets. This is funny, Chris, given all the talk this is getting, delayed tax refunds were then taken into Best Buy and spent there, Best Buy is saying. So, that helps sales as well. The company is a great tale of retail survival. Let's recall, at the end of 2012, it was being left for dead due to The stock is up more than 200% since then, as Best Buy has righted itself, righted the ship, by really focusing on helping people use their technology, learn how to use it. They're now focused on connected homes. They now have online sales that are about 13% of total U.S. sales. They have some new ideas coming. Best Buy Smart Homes is an operation in 400 stores. They're testing 24/7 support for all tech products, whether you bought it at Best Buy or not, you can call Best Buy and get support for your product. And they have an in-home advisor program that they're setting up, because as homes become smart, you need help making that happen. So, they've really done it right, and they have the tailwind of being in tech, where all the action is. But still, it's a good tale of how a retailer left for dead can survive.

Hill: And you think about how part of their plan was making over the stores, almost similar to what we saw with Panera and the 2.0 initiative that they have. I'll base it off of my experience at the Best Buy that's just a couple miles from Fool headquarters, it underwent a dramatic transformation. But, that's the kind of thing that takes time, it takes a lot of money. But, to your point, give them credit. Hubert Joly, the CEO, this was a pretty audacious plan, and they appear to be pulling it off. Stock at an 11-year high. If you think the good times are going to continue, do you wait for a pullback here?

Fischer: I don't know. The shares traded at 13 times forward earnings estimates, and only about six times free cash flow right now, and they have about a 2.2% yield. So, it's not an expensive stock. If you believe the future is bright, you could buy some shares now.

Hill: I want to go back to something you said, Jeff, about how this was left for dead just five years ago. We've talked a lot recently on this show about the traditional bricks-and-mortar retailers. Ron Gross made the point two weeks ago, look, some of these just aren't going to survive. That's how capitalism works, and it's unfortunate for the people who work there, but that's how it works. When it comes to the stocks, if you actually think these things are going to go to zero, why wouldn't you short more of them? We saw Sears earlier this week spike up not because they had a great quarter, but because their quarter was slightly less terrible than anyone thought it was going to be.

Fischer: Yeah. If you had the foresight to short a handful of years ago, at least, you could have shorted a lot of these companies fairly cheaply. But now, the last few years, the story has been so telegraphed to the world that's it's very expensive to short most retailers, even if you can get shares to borrow -- in many cases, you can't. But, Sears, for example, at one point, it cost 90% a year of the short shares that you're borrowing just to short shares. So, you were banking on bankruptcy to make 10%. So, it's very expensive to short, and then you have cases where some retailers are surviving and doing well anyway. In Pro, we were short Five Below, the chain directed toward kids, all items are $5 or less. We covered almost two years ago around $27, and now the stock is above $50, so it's almost double.

Hill: Good timing.

Fischer: [laughs] Yeah. It's just to show that retailers who do it right are still doing well.

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