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Best Buy Co., Inc. Message Board

  • goldentouchbronx goldentouchbronx Feb 22, 2014 4:50 PM Flag

    Vincent

    Whats your play going into the earnings on thursday?

    I went super short into the holiday release (like we discussed), I am already getting my short positions ready for next week.

    I think the earnings are going to miss much further than you/I would expect. This price matching is going to hurt margins. With bad weather and sales that were accelerated into the xmas season (because of additional discounting) I think jan sales (which are included in this earnings season) are going to be much worse than expected.

    I can easily see another drop after earnings, this time below 20, and closer to the 14 dollar range they got a buyout offer last year.

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    • One more thing with the market falling over 90 points off it's highs late today I was very surprised BBY even held over $25.

    • I think you may be right about a decent miss that's what I thought last week too. But the numbers have come down a lot and weather has improved in a lot of the affected parts of the US but it may be too late for this quarter guidance will be key too. Now will the market give BBY a pass if the earnings are close who knows? The market killed CONN's after their report last week but they were guilty of the same thing that killed their shares in September that was they were doing a poor job with their credit portion of the business despite SSS up over 33% but their numbers were poor. I'm in NY and the weather has finally eased up about a week or two ago. When they reported the poor holiday numbers (on Jan 16 I believe) the conference call said that traffic was weaker than they expected in addition to the discounting which tells me I think they will miss but the key may be the revenue number. Two other factors may be gift cards which could have boosted sales after the holidays and have they cost cut by laying off holiday help? The total value of gift cards I gave to friends and family was about 75% of gifts, you can buy them on line and they don't get recognized until they are redeemed. I'm holding some shares long that I was buying after the January drop but I have not bought any since I may trim some before Thursday. In this market when you think for sure one thing will happen something else shows up. BBY reports before the open now if it's a slight miss and shares sell off in the pre-market watch to see if they rally back before 9:30am then I think they go green by 4pm. Good luck it will be interesting that's for sure. (Sorry for the long post)

      • 1 Reply to vincent90157
      • I don't think there is any chance in the world for BBY to be green after earnings. But I do agree with you that gift cards can be a big factor.

        The change in the weather will not effect Q4 numbers, might lead to some better guidance for how Q1 is going though.

        The numbers have come down (I believe) 30% since the holiday release. I think that there will still be a decent miss. I wish I was able to draw you a chart on why I feel the way I do but I will give you the short hand.

        Revenue was lower even with deep discounting

        Discounting hurts EPS, not Revs

        Therefore their "deep discounting" has effected Revs and EPS.

        Conclusion; There is a chance that EPS turns negative on the Q4 earnings. Once the earnings turn negative, that can put last years low of 12 a share in play.

    • estimates have been reduced to a point best buy can do nothing but beat the numbers.

 
BBY
35.13-0.2700(-0.76%)Jan 28 4:05 PMEST

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