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Nobody’s buying at Best Buy (NYSE: BBY). Or at least not as many are buying from the world’s largest electronics chain as they were last year.
The company’s third-quarter earnings fell 29% in the three-month period that ended on Nov. 26. The $154 million in profits Best Buy made trailed the $217 million it earned during the same quarter in 2010. Television sales, or lack thereof, were the main culprit for the earnings decline.
Best Buy’s earnings announcement came after the market closed yesterday, and the stock has taken a sharp nosedive since then. In early-morning trading, shares of Best Buy were down nearly 12% to $24.76 from yesterday’s closing price of $28.07. It’s the lowest the stock has dipped in nearly two months.
Best Buy’s third-quarter revenue, while up 1.8% from last year to $12.01 billion, was just shy of analysts’ expectations of $12.14 billion. The company’s operating income for the quarter of $328 million amounted to 47 cents a share – 13% less than the same quarter last year. Its profit margin fell from 3.2% to 2.7%.
Best Buy’s weak earnings are a concern considering the company’s strong close to the quarter during a blowout Black Friday weekend. The retail sector reported record Black Friday sales for the weekend after Thanksgiving, and Best Buy was viewed as one of the companies shoppers flocked to most.
Apparently it wasn’t enough to close the gap on what was an otherwise underwhelming three months of sales.