Best Buy Co., Inc. ($BBY) Stock | Company Reports Weak Holiday Revenue Numbers

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Best Buy Co., Inc. (NYSE : BBY)

 

 

Best Buy Co., Inc. (BBY), a retailer of technology and services company yesterday released revenue results for the nine weeks ending on January 2, 2016 commonly referred to as the holiday season.  Best Buy reported that domestic revenues fell 0.8% year over year for the nine weeks ending January 2nd, compared to an increase of 4.1% in the year ago period.  Best Buy now reports that fourth quarter sales numbers ending later this month are expected to be down 1.5%, the company previously projected unchanged sales.  

 

Best Buy Co., Inc. CEO’s Comments

Hubert Joly, Best Buy chairman and CEO, commented, “During the holiday period, Domestic revenue declined 0.8% against a backdrop where the NPD-reported categories were down a greater-than-expected 4.8%. The Domestic decline was primarily driven by the mobile phone category, which was softer than both our expectations and the prior year. Excluding mobile phones, Domestic revenue increased year over year due to our strong performance in health & wearables, home theater and appliances. Online revenue increased 12.6% on top of a 13.4% increase last year. In addition, we saw a significant improvement in our Net Promoter Score. From a financial perspective, despite a slightly softer-than-expected topline, we are improving our fourth quarter operating income rate outlook as a result of our continuing conviction to a disciplined promotional strategy and strong expense management.”

Joly concluded, “These results and our outlook are driven by the solid execution of our holiday strategy and the leveraging of investments in our merchandise assortment, digital capabilities, higher in-stocks, Blue Shirt and Geek Squad expertise and faster shipping. Ultimately, this performance is the result of the hard work, dedication and customer focus on the part of all of our associates.”  Business Wire

 

BBY Technical Analysis

BBY Chart

BBY gapped down in price yesterday to $27.18, down from the prior day’s close of $29.26, which is a 7% decrease in price. Taking a look at the daily chart, we can see the last time BBY traded below this price level was on May 28, 2014 when it traded at $26.94. Taking a closer look at the daily chart we can see that BBY has been on an overall decline dating back to September 16th when it traded at $38.96. BBY has a float of 298.50 million shares and is trading 3 times the normal daily trading volume. BBY did reach pre market lows of $26.22, but bounced back $0.96 at the open, or equivalent to 4%. For trading purposes, my entry short would have been $27.10 looking for a run to $26. My stop loss would have been $27.25, fearing anything above that and the stock would start to fill in the gap down.

 

Company Profile

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States and internationally. Its stores offer consumer electronics consisting primarily of television and home theaters; digital cameras and camcorders; DVD and Blu-ray players; portable electronics, such as MP3 devices, headphones and speakers, car stereo, navigation and satellite radio; and related accessories. The company’s stores also provide computing and mobile phone products, including notebook and desktop computers, tablets and e-readers, mobile phones and related subscription service commissions, and related accessories; entertainment products, such as video gaming hardware and software, DVDs, Blu-rays, CDs, digital downloads, and computer software; and appliances, including large and small appliances, and kitchen and bath fixtures. It also offers extended warranty service contracts, technical support, product repair, delivery, and installation services, as well as offers snacks and beverages. The company operates e-commerce, retail store, and call center operations under various brand names, including Best Buy (bestbuy.com), Best Buy Mobile, Geek Squad, Magnolia Audio Video, and Pacific Sales, as well as operates Magnolia Home Theater, Magnolia Design Center and Pacific Kitchen, and Home store-within-a-store experiences. As of January 31, 2015, it had 1,700 large and small-format stores. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was founded in 1966 and is headquartered in Richfield, Minnesota.  Yahoo Finance

 

 

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