Soft Revenue Target Is A Concern For Best Buy Co., Inc. (NYSE:BBY)

Posted by Chris Bell January 7, 2014 0 Comment 1027 views

Best Buy Co., Inc. (NYSE:BBY), the $13.64 billion electronics retail chain got a rude shock to herald 2014. This was in the form of a soft revenue warnings and slowdown in demand reported by its competitor Hhgregg on January 6 for the all recently concluded holiday season. On the back of this news, investors panicked and stampeded to get out of the stock of Best Buy Co., Inc. (NYSE:BBY) and other related players, resulting in a 3.1 percent reduction in its share price during yesterday’s trading.

Hhgregg Troubles

Hhgregg which is an appliance and electronics store chain reported yesterday that it expects revenue to come in at $707 million for the fourth quarter which ended on December 31. This represents a close to 14.5 percent dip in revenue compared to previous year, same quarter. Analysts had predicted that revenue for Hhgregg would come in at $759 million. Explaining the dip in revenue during the most important three months for any retailer, Hhgregg has pointed out that it did not go in for heavy promotions where as its competitors were aggressive in pushing their offerings for televisions and tablets via various media channels.

Low Margins

These reasons being furnished by Hhgregg has spooked the investors of Best Buy Co., Inc. (NYSE:BBY) because early in November, during the announcement of its third quarter operations results, the electronics retailer had listed out similar concerns and forecasted a dip in profits during the holiday season sales. Even in the third quarter, Best Buy Co., Inc. (NYSE:BBY) had just about managed to report profits even though its revenue was flat. It had forecasted that special price offers and extended hours during the Thanksgiving sales is likely to have a negative impact on its profit margins.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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