Piper Jaffray: 'Best Buy's Results Shows To Us That They Are Taking Market Share Across A Broad Range Of Categories'

Best Buy Co Inc BBY reported better than expected first-quarter earnings on Thursday following which it shares opened strong and ended the day with gains of almost 4 percent. Peter Keith, Piper Jaffray, was on CNBC post the results to weigh in on the earnings.

Market Share Gainers

“We are very impressed,” Keith said. “It was a solid quarter and what I would classify as a tough quarter for consumer electronics. We did see the industry backdrop slowdown coming off of a decent holiday.”

“Best Buy likes to cite some industry data that was down 5.3 percent relative to Q4 that was down 3.2. But there sales came in better than expected with […] same store sales growth of 0.6 percent. So, it shows to us that they are clearly taking market share across a broad range of categories.”

Growth Drivers

Keith was asked where exactly or in which categories is Best Buy seeing growth. He replied, “I think first and foremost you are seeing share gains in the TV category and people are now upgrading to these larger screen 4k TVs, Best Buy has upgraded the assortment there and they provide best in class service to drive share."

“You are also seeing some gains in the mobile phone category and appliances and PCs. I would say it’s pretty uniformly across the [store], you are seeing pretty consistent share gains at this point.”

Connected Home

On connected home being an opportunity to look forward to for Best Buy, Keith said, “Connected home has been talked about for a number of years. It does seem to be getting some traction even in the home [equipment] space.”

“I don’t think that’s going to be a calendar year 2015 or even a calendar year 2016 event, but certainly when you look at a couple of years that is a product category that could ramp up nicely and Best Buy would be in a sweet spot in offering that selection to the customer,” Keith concluded.