Why isn’t this the ‘Best Buy’ on Wall Street!?
Best Buy has… sales that increased by 6% from a year ago, online sales up 10.1%, and a share price up 32% over the past year – pretty sweet, right? Furthermore, the company has not become Circuit City or Radio Shack…or even Sears (die already, won’t you?). And business is booming in spite of the recent-ish shift from brick-and-mortar to online sales.
They have made a smooth transition… into the “digital shopping era” by closing underperforming stores, offering free shipping on orders over $35, and allowing customers to buy online and pick-up in store. Additionally, Best Buy offers in-store customer support and provides customers the ability to preview their next several thousand dollar purchases, such as a television or speakers, before buying. Best Buy’s hands-on experience and in-store expertise are things you just can’t get on the internet.
But none of that is enough… for Wall Street, and Best Buy shares were down 7% on Tuesday. Investors wanted to see more online sales growth and were disappointed with the company’s profit outlook for next quarter. Many are also skeptical of the retailer’s results because people are blowing money everywhere right now and ballooning retail sales. So maybe they’re not the ‘Best Buy’ right now, but we’ll see, Wall Street – ya big babies.