Retail

Best Buy, Worst Buy (BBY)

Best_buy_logoBest Buy Co., Inc. (NYSE:BBY) has issued an earnings warning this morning.  The electronics and home appliances retailer is noting a fall in consumer spending, driven by the recent turmoil in the financial markets and other macro economic factors.  Uncertainty regarding future consumer spending has limited its ability to project revenue for the critical holiday shopping season and the balance of the fiscal year.

It is echoing what has been seen elsewhere: a rapid drop and change inspending habits has taken place since mid-September.  This has created the most difficult climate that thecompany has ever seen.

It also can not adjust fast enough to maintain earnings momentum and it is beginning to adjust its cost structure.    

The sales numbers look atrocious and show that no place is immune rightnow.  The company’s total comparable store sales fell by roughly -7.6%for October after a modest comparable store sales decline forSeptember.  The company is also expecting a sharp drop ahead withcomparable store sales for the four months remaining in fiscal 2009(NOV-08 to FEB-09) could drop to -5% to -15% and now expects thatannual comparable store sales will show a decline of -1% to -8%.

The rising dollar is also expected to lower the international numbers.The company said the low end of its range for the year is now $2.30 EPSand $43.7 billion in revenues.  Its prior range was $3.25 to $3.40 EPS.

The good news is that this gives a P/E ratio of roughly 10-times basedon yesterday’s close.  If you like low P/E’s that will be even lower nowthat shares are down 14% pre-market at $20.40.  The recent lows of the52-week trading range are $20.00, down from a high of $53.90.

For whatever this is worth, the Houston Galleria location looked pretty dead this last Saturday.

Jon C. Ogg
November 12, 2008

Are You Ahead, or Behind on Retirement?

If you’re one of the over 4 Million Americans set to retire this year, you may want to pay attention. Many people have worked their whole lives preparing to retire without ever knowing the answer to the most important question: am I ahead, or behind on my goals?

Don’t make the same mistake. It’s an easy question to answer. A quick conversation with a financial advisor can help you unpack your savings, spending, and goals for your money. With Zoe Financial’s free matching tool, you can connect with trusted financial advisors in minutes. 

Why wait? Click here to get started today!

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.