Can Best Buy Stock Bounce Back After Last Week's 12% Drop?
A spectacular run for Best Buy (NYSE: BBY) shareholders was interrupted last week, as the last major consumer-electronics retailer still standing followed up a strong report with concerns of margins contracting over the holidays. The stock shed 11.9% of its value.
The chain's fiscal second quarter was a beauty. Enterprise revenue rose 5%, as a surprising 5.4% surge in comps was more than enough to offset the closure of a handful of namesake and Best Buy Mobile stores. A 31.2% surge in online comparable sales helped spark the uptick, as internet-fueled transactions are baked into store-level comps. The bottom line grew even faster.
It was a blowout quarter, and Best Buy's outlook for the current quarter suggests another strong showing on both ends of the income statement. However, Wall Street pros began to dial back their profit targets for the seasonally potent fiscal fourth quarter after Best Buy announced additional investments in growth initiatives through the latter half of the fiscal year and probably beyond.
Source: Fool.com