The Death of the Best Buy Turnaround

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By Trey Thoelcke Published
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Best Buy Co. Inc. (NYSE: BBY) shares were crushed in premarket trading Thursday after the company reported disappointing holiday sales and forecast a larger-than-expected decline in quarterly operating margins.

The largest consumer electronics chain in the United States attributed the disappointing results to intense discounting during the holiday season by rivals such as Wal-Mart Stores Inc. (NYSE: WMT) and Amazon.com Inc. (NASDAQ: AMZN), tight supplies of tablets and phones, and weak traffic in December. And Best Buy said it expects its operating margin, excluding items, to be 175 to 185 basis points lower in the current fiscal fourth quarter than a year ago.

Same-store sales at Best Buy were down 0.9% in the United States and up 0.1% internationally in the nine weeks that ended Jan. 4. In that time, total revenue fell about 2.6% to $11.45 billion.

Best Buy has long suffered from “showrooming,” or consumers who check out the merchandise in the store and then go buy the goods online, usually at Amazon. Efforts to woo customers back with steep discounts, free shipping and a redesigned website appear to have had little effect.

Investors were not pleased with the news. Shares dropped about 31% in premarket trading Thursday and opened the regular session near $26.01. The 52-week trading range is $13.83 to $44.66.

Photo of Trey Thoelcke
About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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