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Best Buy Down by 14% Despite Reporting Better-Than-Expected Earnings

·2 minuto per la lettura

The shares of Best Buy are down by nearly 14% over the past 24 hours despite the retailer reporting better-than-expected quarterly earnings.

Best Buy Reports Excellent Quarterly Earnings

Best Buy, one of the leading retailers in the United States, reported its fiscal third-quarter earnings earlier today, and the company outperformed analysts’ expectations. The company’s earnings per share for the third quarter was $2.08 adjusted vs. $1.91 expected. Meanwhile, Best Buy generated $11.91 billion in the third quarter, surpassing analysts’ estimate of $11.58 billion during that period.

The consumer electronics retailer saw its sales jump during the pandemic as customers upgraded the technology hardware in their homes and offices to meet the demands of working from home. Best Buy said the trend continued in the last quarter, as home theaters and appliances lifted sales, in addition to smartphones.

The company’s net income was $499 million, or $2.00 per share, up from the $391 million, or $1.48 per share, reported in the same quarter last year. The net sales for Best Buy rose to $11.91 billion from $11.85 billion a year earlier, surpassing what Wall Street analysts had predicted.

BBY Down by Over 14%

The shares of Best Buy are down by 14% since the US market opened a few hours ago despite the company reporting strong quarterly earnings. The increase in shipping costs is something investors are worried about as they believe it could affect the prices of electronic products.

BBY stock chart. Source: FXEMPIRE
BBY stock chart. Source: FXEMPIRE

Furthermore, Wall Street analysts said Best Buy could record a decline in sales in the fourth quarter of the as consumers shift spending to other areas like travel and entertainment. This could force Best Buy to offer promotions on electronic gadgets despite the high supply chain costs.

BBY is trading at $118.61, down by 14% over the past few hours. Year-to-date, BBY has added more than 22% to its value, outperforming some of the other leading retailers in the United States. If the prediction pans out, then BBY’s value could drop below the $110 level over the coming days or weeks.

This article was originally posted on FX Empire

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