Why Best Buy Sold Off
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of big-box retailer Best Buy (NYS: BBY) are seeing more selling today than buying, down 10% at the low, after the company reported earnings this morning.
So what: Fourth-quarter revenue inched higher by 3% to $16.6 billion, with a non-GAAP profit of $2.47 per share. On a GAAP basis, the company posted a loss of $4.89 per share. Comparable-store sales fell 2.4%.
Now what: The company is implementing a "transformation strategy" to focus on cost reductions and store format improvements, including $800 million in cost cuts by fiscal 2015. The company is closing down 50 domestic locations in the coming year, while opening 100 smaller Best Buy Mobile stores. The days of the big-box retailer are over, and Best Buy will just be another casualty.
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At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Best Buy. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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