Best Buy (BBY) CEO Hubert Joly turned his stores into the most fabulous showrooms in consumer electronics. Now he just has to prove the chain can profit from the parade of customers.
For the record, the company reported non-GAAP earnings per shares of 18-cents vs 12-cent estimates. Shares are getting beat up a little bit on soft comparable store sales growth of 0.3% and cautious comments regarding the pricing environment in Q4. Neither of those actually matter, but with shares up more than 200% year to date, taking profits is the better part of valor in terms of protecting profits.
There isn't a human being on earth who should be surprised by competitive pricing in Q4. Walmart (WMT), Target (TGT), and every other retailer on earth have spent tens of millions vowing not to be undersold during the holiday shopping season. Of course Best Buy is matching. As for comps, once traders get around to reading the actual release they'll see that domestic comps were up 1.7%, solid performance given the disruption of the floor-space modifications done over the quarter as the chain transforms itself from museum to retail carnival.Read More »from This Year’s Surprising Top Stock Knocked Off Its Perch After Sales Growth Disappoints