What Happened?
Shares of electronics retailer Best Buy (NYSE:BBY) fell 10.3% in the morning session after the company reported weak third-quarter results, which missed analysts' revenue and earnings expectations. It also added fuel to the fire by lowering its full-year revenue and EPS guidance. Management attributed the weakness to "a combination of the ongoing macro uncertainty, customers waiting for deals and sales events, and distraction during the run-up to the election, particularly in non-essential categories, led to softer-than-expected demand."
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What The Market Is Telling Us
Best Buy’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Best Buy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 16.6% on the news that the company reported second-quarter earnings results. Revenue beat by a narrow margin, while EPS beat more convincingly. The company observed signs of demand stabilization and, as a result, raised EPS (non-GAAP) guidance for the full year ahead (ahead of expectations). Overall, this quarter had some key positives.
Best Buy is up 11.7% since the beginning of the year, but at $86.32 per share, it is still trading 16.4% below its 52-week high of $103.30 from September 2024. Investors who bought $1,000 worth of Best Buy’s shares 5 years ago would now be looking at an investment worth $1,059.
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