Being a model of consistency obviously hasn't gotten old for electronics and entertainment retailer Best Buy (NYSE:BBY). With the determination of the world-champion Detroit Pistons, Best Buy has taken control of its industry and is leveraging a strong management base to retain its hold going forward.
Best Buy's first-quarter earnings came in at $0.34 per share, which was slightly better than the $0.33 expected by analysts and trounced the $0.21 earned last year. Revenues of $5.48 billion slightly beat expectations and bested the 2003 number by 17%. Same-store sales (sales at stores open at least a year) were up a healthy 8.3% as the company benefited from increases in flat-panel television and digital camera sales.
Now that we got the preliminaries out of the way, let's focus on the main event, which is a view of Best Buy's market. The company's main competitor, Circuit City (NYSE:CC), is still trying to turn around recent operating losses and is not a serious threat by itself. Add in Rex Stores, which I have already deemed as No Best Buy, and you have barely enough oranges to squeeze out some juice.
When you stroll through stores like Costco (NASDAQ:COST), Wal-Mart (NYSE:WMT) and its Sam's Club, Target (NYSE:TGT), and even virtually look around eBay (NASDAQ:EBAY) and Amazon.com (NASDAQ:AMZN), Best Buy-like products are in great abundance. Best Buy, which David Gardner recommended in the December 2003 issue of Motley Fool Stock Advisor, maintains its big slice of the pie by offering top products that are supported by knowledgeable professionals who ease you through the process. My wife and I have only had one questionable experience in all the years we have been shopping at Best Buy. That day, we had at least three sales people circling us like vultures as we were trying to make an appliance decision. We got so miffed at one point that we walked out and went to Lowe's to buy the item.
Many companies have come and gone in the consumer electronics and appliances industry, but Best Buy is here to stay. With its rock-solid management team and a clear vision, the company has quite a bright future. The shares are trading at about 16 times next year's earnings estimate of $3.36 per share; this still compares very favorably to the near 20% growth expected next year. The bottom line is that Circuit City is making some strides but Best Buy is truly the industry's best buy.
Amazon.com and eBay, along with Best Buy, are among David Gardner's Motley Fool Stock Advisor recommendations. And Costco is one of Tom Gardner's recommendations. To learn more, sign up for six months with a money-back guarantee.
Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.
