Thursday, December 2, 2021

Best Buy Stocks Drop Due To Theft, Supply Limit

NEW YORK (AP) – Best Buy Co. fell on Tuesday after the nation’s largest consumer electronics retailer reported lower gross margins in the third fiscal quarter, citing organized theft and increased promotions from a year ago.

The company also released a conservative outlook for key sales figures for the fourth quarter of the holiday season, amid supply constraints that are plaguing the entire retail industry.

The stock fell more than 16%, or $ 22.17 a share, to $ 115. 63 in the morning trade. The stock slump came even as Best Buy’s overall third-quarter results beat Wall Street’s estimates.

“We are definitely seeing more and more organized retail crime and layoffs in our offices,” Corey Barry, CEO of Best Buy, told analysts during a conference call. “This is a real problem that hurts and scares real people.”

She noted that the company is hiring security guards and working with its suppliers on creative ways to create a product. In a separate conversation, Barry told reporters that the company has seen an increase in organized theft across the country, but especially in San Francisco.

Best Buy is one of many retailers reporting an increase in organized crime incidents. On Monday night, a group of thieves broke windows at a Nordstrom store in a prestigious Los Angeles mall.

Best Buy also faced a slowdown in computer sales a year ago, as constrained consumers adjusted to work and study from home. Sales of computers and tablets account for about 45% of the company’s internal revenue.

“Compared to last year, when consumers were still adjusting to work and study at home, computing just didn’t have the momentum it used to have,” said Neil Saunders, managing director of GlobalData Retail.

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Home appliances remained strong, up 10.9% qoq after rising 39.3% a year earlier as buyers continue to renovate their homes.

The company reported third-quarter earnings of $ 499 million, or $ 2 per share. Earnings adjusted for amortization and M&A costs were $ 2.08 per share.

The results exceeded Wall Street’s expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research implied earnings of $ 1.95 per share.

Gross margin fell to 23.4% from 24% a year earlier.

The consumer electronics retailer reported revenue for the period of $ 11.91 billion, also beating Street’s average forecast of $ 11.71 billion.

The company reported a 1.6% increase in sales in stores that have been open for at least a year. This is in addition to an increase of 23% over the same period last year.

Best Buy expects revenues in the range of $ 16.4 billion to $ 16.9 billion for the current quarter ending in January, compared with an average analyst estimate of $ 16.95 billion.

The company expects annual revenues of $ 51.8 billion to $ 52.3 billion. Analysts expect $ 51.86 billion.

Best Buy predicts fourth-quarter like-for-like sales in the range of 2% to 1%. Analysts expect 0.1% growth.

The company is raising its annual one-store sales forecast to 10.5-11.5%. Analysts are expecting 11.5%.

Best Buy shares are up 38% year-to-date and the S&P 500 is up 25%. The stock is up 16% in the past 12 months.

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Story items were created by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access the BBY Zacks Stock Report at https://www.zacks.com/ap/BBY.

Nation World News Deskhttps://nationworldnews.com
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