Best Buy Shareholders Got A Lump of Coal For Christmas

The big-box retailer announces dissapointing earnings

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Scott Olson / Getty Images

A shuttered Best Buy store in Chicago on April 16, 2012

Best Buy announced Thursday morning that domestic same-store sales fell 0.9% over the holiday season, sending shares in the big-box retailer tumbling more than 25% in early trading. Same-store sales growth—or the change in revenue from existing stores—is a key metric for the retail industry because while new stores might grow revenue, the performance of existing stores is a predictor of what the company can achieve once no more stores can be built.

Investors had been optimistic about newly hired CEO Hubert Joly’s “Renew Blue” turnaround plan, which includes closing larger stores and opening smaller locations more focused on popular products like smart phones. Joly has also focused on turning its 1000-store base into distribution centers for its ramped-up online operation. Shares in Best Buy had increased 161 percent over the past year, as investors bought into the vision.

But with today’s earnings announcement, it appears that investors are at least starting to wonder about giving Best Buy the benefit of the doubt.

6 comments
Openminded1
Openminded1

Best Buy is not the best buy, that is why they are going under, along with piss poor management and customer service.

Idahotf
Idahotf

Doesn't surprise me. After they screwed my 75 yo mom on a computer and said to bad, I have made sure I let everyone know about it and refuse to shop there. They get what is coming to them.

Gr8aunt119
Gr8aunt119

I went to my local Best Buy a few years ago when I was thinking about changing cell phone vendors.  The young salesperson in the store couldn't have been less interested in helping me.  He wasn't condescending but was totally disinterested in educating me about the different plans available from the different companies.

Paradise5551
Paradise5551

I honestly think the deals people are getting on places like amazon where a bunch of stores are competing for sales is really affecting best buy.

Brevspread
Brevspread

@Idahotf So you're the source of Best Buy's demise. Shame on you, Wizard!

JoeAbello
JoeAbello

@Paradise5551Best Buy's inventory isn't very good anymore so more often than not it is easier to find the items you're looking for online.  That and you don't have to put up with their dumb uninformed poorly trained employees who provide no customer service.