Stock Ticker

  • Loading stock data...

Best Buy Co Inc (NYSE:BBY) Speculating Low-Earning Holiday Season In Light Of Price Cuts And Weak Demand

Boston, MA 08/27/2014 (wallstreetpr) – Best Buy Co Inc (NYSE:BBY), in the light of lesser sales and huge price cuts, is anticipating yet another low-earning holiday season. This is so because the fight if shopper dollars is surmounting gradually in not just the online stores, but also at brick-and-mortar shops.

Customer Demand Weakening

Best Buy Co Inc (NYSE:BBY) said that because of cut-throat competition in the market as well as weakening customer demand, there is a speculation that the sales would drop down in next two quarters as well. This would mean that Best Buy Co Inc (NYSE:BBY) shall be reporting a downward trending third straight quarter, leading to falling revenue as well. It is worth noticing that in the quarter which ended on August 2, 2014, the sales of company at its U.S. stores dropped down 2%.

The Chief Executive Officer of the company, Hubert Joly, in an interview with The Wall Street Journal, said, “You cannot expect the same kind of growth rates that you saw a few years ago.”

A Strategy that Boomeranged

In the 2013 holiday season, the retailers offered heavy discounts in order to attract more customers who are concerned about prices. Nevertheless, this strategy boomeranged and showed its effect on the end-of-the-year profitability as well. In the last holiday season, in fact, Best Buy Co Inc (NYSE:BBY) reported sales drop, which was quite surprising. Further, the prediction of company about yet another weak holiday season sales show that there lie very difficult times ahead.

However, it is also important to note that Best Buy Co Inc is not the only one speculating weak and rough holiday season. Other retailers like Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) too are predicting tampered expectations in light of weak demand from consumers.

Earlier in 2014, Best Buy Co Inc (NYSE:BBY) had voiced out about its plans of investing more in the online operations so as to deal with the difficult times of previous year. Even though, its plan seems to be working fine, but it is happening at a cost. In the meanwhile, The Wall Street Journal, in June 2014 also reported that Best Buy Co Inc (NYSE:BBY) was looking forward towards Chinese markets as well for business.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).

Recent Stories

Sponsored Content

Sign Up To Get Our Latest Stocks Alerts