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Best Buy sees surge in demand for items that help people work from home

Refrigerators and freezers are also in high demand, Best Buy’s CEO says

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By Tonya Garcia, MarketWatch

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Best Buy says workers have been shopping for items to build a home office.

As the coronavirus drives workers to their home offices in order to self-isolate, Best Buy Co. Inc. says it has seen a rise in demand for merchandise that will make those workstations functional.

“We are seeing a surge in demand across the country for products that people need to work or learn from home, as well as those products that allow people to refrigerate or freeze food,” said Corie Barry, Best Buy’s chief executive, in a statement.

On the e-commerce home page, Best Buy /zigman2/quotes/205918291/composite BBY +0.15%  highlights the virtual in-home consultations for tech advice, deals on laptop computers, and contactless pickup from stores.

Read: Walmart’s stock wins second upgrade of the week as shoppers flock to grocers amid coronavirus

“We believe Best Buy has recently benefited from consumers stocking up on PCs/monitors as they work from home/home-school, but see headwinds from supply chain disruption, delays in anticipated new products (5G, mobile phones, etc.) and high COVID-19 exposure outweighing the near-term benefits,” wrote Wells Fargo analysts in a Monday note.

Wells Fargo rates Best Buy stock equal weight with a price target of $55, down from $85.

Instinet analysts led by Michael Baker are more bullish.

“We believe Best Buy is better off then most retailers in the current environment for several reasons, not the least of which is that they sell products that consumers want in the new virus world,” Instinet said in a Tuesday note.

“Best Buy also has one of the strongest balance sheets of any company in our coverage universe.”

Instinet rates Best Buy stock neutral and lowered its price target to $60 from $76.

Office Depot Inc. /zigman2/quotes/204015456/composite ODP +1.50%   also features atop its home page a guide to preparing a business to work from home. The guide includes a statistic showing that even before the coronavirus pandemic, half of global employees were working from home 2.5 days per week.

Among the tips are providing enough VPN licenses for staff, and making sure home offices meet IT security protocols.

Office Depot also has workstation bundles for furniture, including a desk, desk lamp and dry erase board, and technology needs.

Though Staples Inc. may be best known for its office equipment merchandise, the retailer says it has seen skyrocketing demand for things like hand sanitizer and face masks. The retailer said it’s prioritizing purchasing these of items by hospitals and other medical professionals.

See: CVS receipts and wet wipes as toilet paper? People are flushing all the wrong alternatives during coronavirus shortage

Home Depot Inc. /zigman2/quotes/208081807/composite HD +0.84%   and Lowe’s Cos. /zigman2/quotes/205563664/composite LOW +1.05%  , which sell both appliances and disinfecting and sanitizing items, has also talked about its role as an essential retailer.

“Our stores will remain open to provide essential products to customers, government officials and first responders,” Lowe’s says on its website.

“Our customers depend on us for urgent needs such as hot water heaters, refrigerators, cleaning supplies, electrical and plumbing repairs, bottled water and harsh weather items like tarps, propane and batteries. Our stores are critical to serving communities, especially in times of disaster and crisis.

Best Buy has suspended in-home installation for major appliances, though items can be left by a customer’s door.

Don’t miss: Restaurants can’t survive on delivery alone, says Grubhub CEO Matt Maloney

Workers who are feeling sick will receive sick pay, Best Buy said. And those who don’t feel comfortable coming to work aren’t required to.

“Field” employees who have seen their hours cut will receive two weeks pay based on the normal wage rate for the average hours worked over the last 10 weeks.

Best Buy stock soared 14.6% on Tuesday, but is down 17.1% over the last year. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.06%   has fallen 14.8% for the past 12 months.

$ 102.90
+0.15 +0.15%
Volume: 1.78M
Aug. 7, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$26.58 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 18.98
+0.28 +1.50%
Volume: 539,826
Aug. 7, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$999.58 million
Rev. per Employee
$ 271.64
+2.27 +0.84%
Volume: 2.85M
Aug. 7, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$292.16 billion
Rev. per Employee
$ 152.78
+1.59 +1.05%
Volume: 2.90M
Aug. 7, 2020 4:03p
P/E Ratio
Dividend Yield
Market Cap
$115.35 billion
Rev. per Employee
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p

Tonya Garcia is a MarketWatch reporter covering retail and consumer-oriented companies. You can follow her on Twitter @tgarcianyc. She is based in New York.

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