I typically steer clear of brick-and-mortar retail but BBY looks like a diamond in the rough at current levels. I would say the thesis is 50% near-term sales boost and earnings beat likelihood, 30% tariffs overreaction, and 20% structural.
Specific tailwinds:
* \[near-term\] Nintendo Switch 2 pre-orders sold out in a day (4/24/25), BBY claimed a huge share of this. The Switch 2 game release cycle bodes well for BBY too.
* \[near-term / tariffs\] Panic-buying electronics in response to tariff FUD - this mostly happened in late March / early April but still constructive for near-term revenue.
* \[tariffs / structural\] Reputation for higher quality inventory vs. main competitors (Amazon, Walmart) means BBY shoppers could be less price-sensitive against tariff inflation risk. In other words, BBY could be better able to pass thru tariff impact without losing customers.
* \[tariffs\] Stock is down heavily YTD despite top- and bottom-line beats on earnings last quarter. The earnings call coincided with Trump's "Liberation Day" announcement - max fear. So the stock never got the bump it deserved for a clean beat and strong company fundamentals.
* \[structural\] The demise of brick-and-mortar is overblown and BBY has a "last-man-standing" advantage in B&M electronics. Like peers such as TGT, they are transforming from big-box only to smaller footprint "experience-focused" stores in urban areas.
Do you agree with me? Want to poke holes in my thesis? Happy to start a discussion!