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Bear of the Day: Best Buy (BBY)

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Black Friday isn’t what it used to be. Long gone are the videos of shoppers beating the doors down at 7am, sprinting in to grab the great deals that officially kickoff the holiday season and put companies into the “black” on the year. The paradigm shift of online shopping and pushed a lot of that money online, not at the brick and mortar spots we are used to seeing. For those traditional stores that open up their omnichannel presence, profits come. For those still struggling to keep up with online and in-store, the challenge can hit the bottom line.

That’s the case with today’s Bear of the Day, Best Buy (BBY - Free Report) ). Best Buy is the electronics retailer with over 1,000 stores and 90,000 employees in the US and Canada.

The company just reported Q3 EPS of $1.29 on revenues of $9.76 billion. That beat expectations for EPS but fell short on the topline. The company also cut its FY24 outlook, citing sales trends so far in November, guiding Q4 same store sales contracting 3 to 7%. The company’s CEO said, “In the more recent macro environment, consumer demand has been even more uneven and difficult to predict.”

This report led to seven analysts cutting current year EPS estimates and eight dropping their numbers for next year. The negative impact to our Zacks Consensus Estimate for the current year dropped the number from $6.22 to $6.17 while next year’s number is off from $6.86 to $6.41. That’s forecast to come on revenue contractions of 6% this year and nearly 2% next year. That’s why the stock is rated as a Zacks Rank #5 (Strong Sell) due to its weakening earnings trend.

The Retail – Consumer Electronics industry sits in the Bottom 6% of our Zacks Industry Rank. There are two stocks within the same industry that are currently Zacks Rank #3 (Hold) stocks. These are Conn’s (CONN - Free Report) and GameStop (GME - Free Report) ).

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