This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Best Buy Investors Wishing It Were 2013 Again

NEW YORK (TheStreet) -- Best Buy (BBY - Get Report)BBY may be fading into extinction as the "show-rooming effect" continues to weigh on sales growth.

The electronics retailer said on Thursday that revenue fell 3% to $9.04 billion during its fiscal first quarter that ended May 4.

Although the company has been aggressively cutting costs, while revamping merchandise and store formats to attract customers, sales have continued to slide. Best Buy said revenue in stores open at least 14 months, a key retail metric, declined 1.9%, and the company expects same-store sales to decline in the next two quarters, as well.

"As we look forward to the second and third quarters, we are expecting to see ongoing industrywide sales decline in many of the consumer-electronics categories in which we compete," Best Buy Chief Financial Officer Sharon McCollam said during the earnings call.

Best Buy's stock has fallen 35% in 2014 after a run-up of almost 300% the previous year. Last year, investors and Best Buy executives believed they had found the answer to combat customer's flight from in-store retail to online purchasing.

"I think that Best Buy has killed show-rooming," the retailer's chief executive, Hubert Joly, told the Wall Street Journal in November.

The electronics chain boasted about its success converting customers who would normally go to a Best Buy outlet to try out products before buying them online from another retailer.

Best Buy's strategy was to offer competitive prices to deter customers from leaving the store to purchase online and instead to buy products on-site. But that strategy didn't work.

When Best Buy announced that its same-store sales for December -- the most important month of the year for most retailers -- fell by 0.9% from a year earlier, the company's shares plunged by 30%. And during the fiscal fourth quarter, margins fell.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BBY $36.84 -1.10%
AAPL $110.29 0.72%
FB $93.13 0.71%
GOOG $641.21 0.32%
TSLA $219.61 -3.10%


Chart of I:DJI
DOW 17,090.54 +39.79 0.23%
S&P 500 2,013.43 +15.91 0.80%
NASDAQ 4,812.1050 +1.3170 0.03%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs