Best Buy Crippled

By Douglas A. McIntyre Published Aug 31, 8:30AM EDT

Best Buy Crippled — © grinvalds / Getty Images

Best Buy Co. Inc. (NYSE: BBY | BBY Price Prediction) 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.
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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.
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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.
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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.
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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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.