Best Buy Co. (BBY) is probably the best-in-class retailer for consumer electronics, but even it is struggling amid worsening economic conditions. On Tuesday the company reported abysmal figures. Third-quarter net income dropped 77% to $52 million, or 13 cents a share, from $228 million, or 53 cents a share, a year earlier.
Management also announced that it is offering voluntary severance packages for almost all its corporate employees and is cutting capital spending to bring costs in line with the new revenue situation.
The company’s stock then took a long ride north, posting its greatest gain in eight years. As I maintained this past weekend, though, all retailers are moving against severe headwinds. These gains in share value are likely unsustainable, even for a market leader like Best Buy. December has witnessed a mini-rally among several large retailers – Macy’s (M) was up 18% yesterday alone – and as I mentioned previously, this rally could produce an excellent short opportunity by the end of the year.
Wildfire Smoke Chokes Skies in Spain and France
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Hundreds of thousands of people, including residents as well as
vacationers, were forced to evacuate or told to remain indoors.
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