Stock Market Today: Best Buy Shrinks as Dollar Tree Grows
The Dow Jones Industrial Average has gained 18 points in pre-market trading, suggesting a positive start to the stock market today. World markets were mixed overnight, with Asian indexes following Wall Street higher and European stocks down by 0.4% as of 7:30 a.m. EDT.
Individual stocks on the move today include Best Buy and Dollar Tree , after both retailers delivered quarterly results before the opening bell this morning.
Best Buy posted a steeper than expected revenue dip, but managed to beat Wall Street's profit forecasts for the quarter. Sales fell 3% to $9 billion, while earnings ticked higher by $0.01 to $0.33 a share. Still, the results show a retailer that is far from achieving its turnaround: Comparable-store sales fell by 2% in the U.S. and by 6% internationally while profitability slipped again in both markets. Chief Financial Officer Sharon McCollam said in a press release that the industry outlook isn't much better for the next two quarters: Best Buy expects "ongoing industrywide sales declines" in many of its consumer electronics categories, particularly mobile phones. That softness should keep comps negative for at least another six months, McCollam said. Best Buy did manage a solid 29% boost in online sales and some significant cost reductions, but an overall sales rebound still seems far off for this struggling retailer. The stock was up 0.3% in pre-market trading.
Dollar Tree this morning booked a 7% sales improvement to a quarterly record $2 billion. Profit came in at $0.67 a share, up 14% from last year's haul. Comparable-store sales were up 2%, which is a result that many retailers would have killed for this past quarter. That growth was thanks to both an uptick in customer traffic and a higher average order. But even better news for investors might be that growth in Dollar Tree's discretionary business is outpacing its consumables business, which suggests that profitability could march higher (consumables sales are often less profitable than discretionary ones). The company also provided an updated sales and earnings outlook that broadly met Wall Street's forecasts: Dollar Tree expects full-year sales of about $8.5 billion, an 8% increase over last year's result. The stock was up 7% in pre-market trading.
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The article Stock Market Today: Best Buy Shrinks as Dollar Tree Grows originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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