What Happened?

Shares of electronics retailer Best Buy (NYSE:BBY) fell 14.8% in the afternoon session after the company reported a mixed fourth quarter, but the negatives outweighed the positives as EBITDA missed expectations, and full-year EPS guidance came in below what Wall Street was hoping for. 

On the other hand, sales and earnings exceeded expectations for the quarter. However, guidance assumed minimal change in consumer behavior due to inflation, which wasn't reassuring. Overall, this was a weak quarter.

The shares closed the day at $75.20, down 13.4% from previous close.

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What The Market Is Telling Us

Best Buy’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. Moves this big are rare for Best Buy and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 16.6% on the news that the company reported strong second-quarter earnings results. Revenue beat by a narrow margin, while EPS beat more convincingly. The company observed signs of demand stabilization and, as a result, raised EPS (non-GAAP) guidance for the full year ahead (ahead of expectations). Overall, this quarter had some key positives.

Best Buy is down 11.8% since the beginning of the year, and at $76 per share, it is trading 26.4% below its 52-week high of $103.30 from September 2024. Investors who bought $1,000 worth of Best Buy’s shares 5 years ago would now be looking at an investment worth $945.16.

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