Piper Jaffray: Best Buy's Results Shows It's Taking Market Share Across A Broad Range Of Categories

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

Market Share Gainers

“We are very impressed,” Keith said. “This was a solid quarter and what I would classify as a tough quarter for consumer electronics. We did see the industry backdrop slow down 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 their sales came in better than expected with postivie 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're 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 story, you're 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 improvement 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 nicely and Best Buy would be in a sweet spot in offering that selection to the customer,” Keith concluded.