Retail stocks have been massacred lately, a graveyard of disappointment as everything from competitive pressures from online retailers like Amazon.com, Inc. (NASDAQ:AMZN) to slumping consumer spending have created headwinds. At a time when large-cap stocks are flirting with new record highs, the SPDR S&P Retail (ETF) (NYSEARCA:XRT) is down around 8% from its high earlier this month.
Everything from big-box stores like Target Corporation (NYSE:TGT) to department stores like Macy’s Inc (NYSE:M) have been caught in the whirlwind, down 30% and 47%, respectively, from their November highs.
But a few have bucked the trend. Like Wal-Mart Stores Inc (NYSE:WMT). And now electronics retailer Best Buy Co Inc (NYSE:BBY), which exploded 22% higher on Thursday after reporting an earnings beat on revenues 3% ahead of estimates on strength in gaming.
BBY stock, which broke out of a three-year-long consolidation range back in November, has now more than doubled from its low last summer.
Further gains look likely. Analysts at Telsey Advisory Group note that Best Buy continues to surprise to the upside, harnessing its position as the only remaining national consumer electronics retailer. Investments in pricing, enhanced store and website formats, and fast/free shipping is leading to further market share gains in their view.
And backing up the argument that BBY’s success is unique, just look at the wipeout underway in GameStop Corp (NYSE:GME) — a company that is also benefiting from increased spending on gaming hardware with the launch of Nintendo’s Switch handheld console.
BBY’s revenue base is more diversified, less subject to online competition, and enjoys a unique position as a “showroom” provider which still matters for purchases like televisions and headphones in this digital age.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.