Can Best Buy Stock Rebound?
T = Trends for a Stock’s Movement
Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services. The company operates retail stores and call centers, and conducts online retail operations under a range of brand names like Best Buy, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House. Best Buy operates in two segments: domestic and international.
Best Buy watched its stock plunge more than 27 percent in morning trading Thursday after announcing poor holiday results that suffered from heavy competition and deep discounting. The consumer electronics retailer said revenue for the nine weeks ended Jan. 4 slumped 2.6 percent to $11.45 billion from the same period a year earlier. Same store sales slipped 0.9 percent in the U.S., though they managed at 0.1 percent boost internationally.
In late morning trading in New York, Best Buy stock tanked nearly 28 percent, or $10.45, to $27.11 a share. Hubert Joly, chief executive of the Minneapolis chain, blamed an epidemic of deals, discounts and bargains across the industry. “The promotional intensity that began with Black Friday continued throughout the period, which led us and our competitors to answer one question — do we make the incremental investment necessary to be price competitive and defend our market share?” Joly said in a statement. “For us, there was only one answer.” But the rampant price slashing “did not result in higher industry demand and had a deflationary impact on our revenue,” Joly said.