Why Investors Are Pounding Best Buy After Earnings
Best Buy sold off on earnings.

When good isn't good enough.

Best Buy (BBY) second quarter earnings smashed Wall Street estimates on Tuesday, coming in at 91 cents a share vs. forecasts for 82 cents a share. Best Buy saw solid sales growth in its stores (up 6.2% vs. estimates for up 4.1%) and online (up 10.1%). The company raised its full year sales and profit outlooks as well.

But investors opted to sell the news. Shares of the electronics retailer dropped as much as 8% in early trading. Here is what caught TheStreet's attention, perhaps explaining the initial market reaction:

  • Online sales growth in the quarter of 10.1% slowed sharply compared to the year ago growth rate of 31.2%.
  • Third quarter earnings are seen in a range of 79 cents to 84 cents a share. The market expected 92 cents a share. 
  • Gross profit margin fell 20 basis points from the prior year to 23.8%. 

Best Buy earnings... $BBY https://t.co/rlEKdkJjL4

— Brian Sozzi (@BrianSozzi) August 28, 2018

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