Best Buy (BBY) Stock Up Today After Canada Subsidiary Closure - TheStreet

NEW YORK (TheStreet) --Shares of Best Buy Co Inc. (BBY) - Get Report  are up by 1.72% to $38.14 at the start of trading on Monday morning. Over the weekend Best Buy announced that its subsidiary, Best Buy Canada, which owns and operates both Best Buy and Future Shop Stores in the country is consolidating both businesses and websites under the Best Buy brand and "unveiled an ambitious plan to build a leading multi-channel customer experience."

The company said this plan is in an effort to "strengthen its position as Canada's leading provider of consumer electronics, products, services, and solutions."

Best Buy has owned Future Shop since 2001 and said that as a result of the consolidation approximately 500 full-time and 1,000 part-time positions will be terminated.

The company also said that it expects to increase its capital spending by up to $160 million over the next 12 to 24 months, and that it anticipates it will record restructuring charges and non-restructuring impairments in the range of $200 million to $280 million.

Insight from TheStreet's Research Team:

A guest contributor commented on Best Buy in a recent post on RealMoneyPro.com. Here is what they had to say about the stock:

The retailer also said it expects diluted earnings per share to be negatively impacted by up to 20 cents in its 2016 fiscal year, due primarily to a temporary increase in operational expenses associated with consolidation activities and store disruptions.

That all sounds pretty bad, but the restructuring actually could refocus the retailer.

Fellow retailer Target (TGT) - Get Report said in January that it would shutter its Canadian operations and cut up to 17,600 jobs.

Since shedding its Canadian operations, Target has become more attractive as a pure-play domestic retailer, the AAP wrote in its weekly roundup.

But therein lies the difference. Target knew when to get out, but Best Buy seems to be hanging on, not just to Canada, but to whatever it can.

-'Best Buy Makes a Canada Consolidation' Originally Published on RealmoneyPro.com on 3/29/2015.

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Separately, TheStreet Ratings team rates BEST BUY CO INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BEST BUY CO INC (BBY) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

You can view the full analysis from the report here: BBY Ratings Report