On Thursday, Best Buy (NYSE:BBY) will release its quarterly report, and shares of the electronics retailer have been under severe pressure all year. After a horrible holiday quarter, Best Buy needs to demonstrate that it can stand up to competition from Amazon.com in the online space as well as Wal-Mart (NYSE:WMT) and other brick-and-mortar retailers. If it can't get profits moving higher in the near future, then Best Buy's turnaround plans could be over before they've truly begun.

Best Buy once seemed like the undisputed champion of the electronics retail space, having bested its chief competitor and moved aggressively forward into the digital age. But even though Best Buy became the biggest player in its niche, companies from outside traditional electronics retail have entered the space and poached a substantial amount of Best Buy's business. Let's take an early look at what's been happening with Best Buy over the past quarter and what we're likely to see in its report.

Stats on Best Buy

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$9.20 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Best Buy earnings grow again?
Analysts have slashed their views on Best Buy earnings in recent months, cutting 40% off their first-quarter estimates. The stock has also languished, remaining essentially unchanged since mid-February after huge declines earlier in the year.

Best Buy's fourth-quarter results were a mixed bag for the electronics retailer, as earnings per share easily topped what investors expected from the company. Same-store sales dropped 1.2%, but Best Buy successfully chopped about $765 million in costs from its North American operations. In addition, online sales rose by 20% in the U.S., meeting Amazon on its own turf by ramping up its e-commerce offerings. Overall, with holiday activity involving substantial promotional discounting across the industry, most investors were pleased with Best Buy's results.

Interestingly, Best Buy continues to work on making use of its expansive store locations by creating partnerships with outside providers. SolarCity became the latest company to join the partnership ranks at Best Buy in March, giving the solar giant a chance to showcase its services while giving Best Buy another reason for shoppers to visit its stores.

But Best Buy faces competitive threats on a number of fronts. Wal-Mart has moved aggressively to offer video game trade-ins, going up against Best Buy in an area that initially seemed useful in encouraging shoppers to use store credit for new-game purchases. Yet Best Buy hasn't had the success it had hoped for with its trade-in program, and so it might well benefit from Wal-Mart pushing Best Buy toward other ideas with potentially greater success.

Best Buy is responding to those threats by increasing its use of data analytics. Its Athena initiative will help Best Buy gather and use personal customer information to better tailor marketing campaigns for specific customers. At the same time, ongoing efforts to boost efficiency in logistics and return-management could help it cut costs even further.

In the Best Buy earnings report, watch to see if the company can stop the bleeding on same-store sales and keep its business moving forward. Even with some short-term profit headwinds, Best Buy could well get itself back on track for earnings growth if it can successfully offer a unique shopping experience to its customers.

Click here to add Best Buy to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger owns shares of SolarCity. The Motley Fool recommends Amazon.com and SolarCity. The Motley Fool owns shares of Amazon.com and SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.