Best Buy stock dips with theft an issue
NEW YORK – Best Buy Co.’s shares tumbled Tuesday after the nation’s largest consumer electronics chain posted a decline in gross profit margin for the fiscal third quarter, citing organized theft and increased promotions compared to a year ago.
The company also offered a muted forecast for a key sales metric for the holiday fourth quarter amid supply constraints that are bedeviling the entire retail industry.
Shares were down more than 16%, or $22.17 per share to reach $115.63 in morning trading. The stock decline came even as Best Buy’s overall third-quarter results beat Wall Street estimates.
“We are definitely seeing more and more particularly organized retail crime and incidents of shrink in our locations,” Best Buy CEO Corie Barry told analysts during a conference call. “This is a real issue that hurts and scares real people.”
She noted that the company is hiring security guards and working with its vendors on creative ways to stage the product. Barry told reporters during a separate call that the company is seeing organized theft increase across the country, but particularly in San Francisco.
Best Buy is also facing a slowdown in computing sales from a year ago when locked-down consumers were adapting to working and learning from home.
Computing and tablet sales account for about 45% of the company’s domestic revenue mix.
“Relative to last year, when consumers were still adapting to working and learning at home, there just isn’t the impetus in computing that there once was,” said Neil Saunders, managing director at Globaldata Retail.
Appliances remained strong, up 10.9% for the quarter.