Canaccord Genuity Morning Coffee on Best Buy (BBY): Who Ordered the Squeezed Margins?
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Price: $85.89 +0.19%
Rating Summary:
7 Buy, 25 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
7 Buy, 25 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on Best Buy (NYSE: BBY): Who ordered the squeezed margins?
Shares of Best Buy tumbled after the electronics retailer posted weaker-than-expected earnings and sales as it was forced to offer promotional pricing to remain competitive with online and discount retailers. Earnings came in at $0.47 per share on sales of $12.10 billion, missing the consensus estimate of $0.51 on $12.14 billion. Samestore sales increased by 0.3%, the first increase in five quarters, primarily due to strength in mobile and computer sales which increased by 8.8%. Consumer electronics fell 4.8% while products in the entertainment category fell by 9.0%. A Barclay’s analyst noted that the company was “more promotional and that doesn’t bode well for the holiday season, which is going to be very, very intense.” During the quarter, Best Buy offered to match any advertised price from its rivals and offered free shipping as it faces increasing competition form Amazon (Nasdaq: AMZN), Target (NYSE: TGT) and Wal-Mart (NYSE: WMT). In an effort to reduce costs and pick up more web business, management is planning to reduce its number of retail locations by 10% in the next three to five years, while continuing to ramp up its online and mobile offerings.
Note - This morning, shares are trading up about 0.50%
Shares of Best Buy tumbled after the electronics retailer posted weaker-than-expected earnings and sales as it was forced to offer promotional pricing to remain competitive with online and discount retailers. Earnings came in at $0.47 per share on sales of $12.10 billion, missing the consensus estimate of $0.51 on $12.14 billion. Samestore sales increased by 0.3%, the first increase in five quarters, primarily due to strength in mobile and computer sales which increased by 8.8%. Consumer electronics fell 4.8% while products in the entertainment category fell by 9.0%. A Barclay’s analyst noted that the company was “more promotional and that doesn’t bode well for the holiday season, which is going to be very, very intense.” During the quarter, Best Buy offered to match any advertised price from its rivals and offered free shipping as it faces increasing competition form Amazon (Nasdaq: AMZN), Target (NYSE: TGT) and Wal-Mart (NYSE: WMT). In an effort to reduce costs and pick up more web business, management is planning to reduce its number of retail locations by 10% in the next three to five years, while continuing to ramp up its online and mobile offerings.
Note - This morning, shares are trading up about 0.50%
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