Best Buy Co. Inc. (NYSE: BBY) announced quarterly results that were extremely poor. At least the company warned Wall Street that the awful results were coming so investors could shield themselves from the bad news.
Revenue dropped from $11.9 billion in the year-ago quarter to $10.3 billion in the most recent. Comparable sales declined 12.1% in that time. The only news that was worse is that online sales fell 14.7% domestically. It is a given that brick-and-mortar retailers need to boost their e-commerce games or be left behind in the battle for customers.
Operating income as a percentage of revenue dropped from 6.7% to 3.6% year over year. Best Buy, in other words, barely made money. The other evidence of this is the company made only $306 million, down from $734 million a year ago.
CEO Corie Barry has let Best Buy fall apart. She has held her job since June 2019. Three years is long enough to prove that she should keep her job. Recent results make the answer clear. She said as earnings were released, “I am incredibly proud of our teams as they continue to rise to the challenges of the past few years and I remain impressed with their ability to lead through the rapidly shifting business environment.” That is an oddly placed pride, given the numbers.
Management’s decisions have sunk Best Buy’s stock by 36% over the past year. Shares of archrival Amazon are off 26% over the same period. Based on Barry’s tenure, it may be better to look back five years. Over the period, Best Buy shares have sharply underperformed the market, up only 37%, while Amazon’s shares have risen 163%.
There is nothing Best Buy management can hide behind. The terrible numbers tell the entire story.
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