The holiday shopping season is the time of the year for retailers in the consumer discretionary sector to get in the black. While some retailers like RH NYSE: RH and Williams-Sonoma Inc. NYSE: WSM are the “haves” and are expected to have a strong holiday season, many retailers are the “have nots” and already presumed to have weak results. This has already led to investors dumping shares for tax harvesting purposes, but the bar may have been set too low. Here are three stocks expected to have weak holiday sa ...

The Best Buy in Montebello, California, on Black Friday, November 29, 2024. (Photo by ETIENNE ... [+] LAURENT / AFP) (Photo by ETIENNE LAURENT/AFP via Getty Images)AFP via Getty ImagesBest Buy’s stock (NYSE: BBY), an electronics specialty retailer, has increased 12% from around $78 to $87 (as of Dec 9, after close) year-to-date, underperforming the broader indices, with the S&P growing about 28% over the same period. At the same time, a tough comparison with the pandemic, stimulus-induced growth, and inflat ...

Financial Performance - Best Buy reported revenue of $9.4 billion for the third quarter of fiscal 2025, a decrease of 3.2% compared to the same period last year[71]. - Comparable sales declined by 2.9% in the third quarter and 3.7% for the first nine months of fiscal 2025, reflecting challenges in the consumer electronics industry[71]. - Gross profit for the third quarter was $2.2 billion, representing a gross profit margin of 23.5%[71]. - Selling, general and administrative expenses (SG&A) were $1.9 billion, accounting for 19.8% of revenue in the third quarter[71]. - Operating income for the third quarter was $350 million, with an operating income margin of 3.7%[71]. - Net earnings for the third quarter increased to $273 million, with diluted earnings per share of $1.26[71]. Domestic Segment Performance - Domestic segment revenue for the three months ended November 2, 2024, was $8,697 million, a decrease of 3.3% compared to $8,996 million for the three months ended October 28, 2023[78]. - Comparable sales for the domestic segment decreased by 2.8% in the three months ended November 2, 2024, compared to a decline of 7.3% in the prior year[78]. - Domestic gross profit for the three months ended November 2, 2024, was $2,049 million, with a gross profit margin of 23.6%, up from 22.9% in the prior year[78]. - Domestic SG&A expenses for the three months ended November 2, 2024, were $1,716 million, representing 19.7% of revenue, compared to 19.2% in the prior year[78]. - Domestic operating income for the three months ended November 2, 2024, was $337 million, with an operating income margin of 3.9%, up from 3.7% in the prior year[78]. International Segment Performance - International segment revenue for the three months ended November 2, 2024, was $748 million, a decrease of 1.6% compared to $760 million for the three months ended October 28, 2023[81]. - Comparable sales for the international segment decreased by 3.7% in the three months ended November 2, 2024, compared to a decline of 1.9% in the prior year[81]. - International gross profit for the three months ended November 2, 2024, was $168 million, with a gross profit margin of 22.5%, up from 22.1% in the prior year[81]. - International SG&A expenses for the three months ended November 2, 2024, were $155 million, representing 20.7% of revenue, compared to 19.9% in the prior year[81]. - International operating income for the three months ended November 2, 2024, was $13 million, with an operating income margin of 1.7%, down from 2.4% in the prior year[81]. Tax and Cash Management - Best Buy's effective tax rate decreased to 23.9% in the third quarter of fiscal 2025, down from 24.7% in the same quarter last year[75]. - Non-GAAP effective tax rate for the three months ended October 28, 2023, was 24.7%, with a decrease attributed to increased tax benefits from green energy incentives[86]. - Cash and cash equivalents as of November 2, 2024, were $643 million, a decrease from $1,447 million on February 3, 2024, primarily due to dividend payments and capital expenditures[89]. - Total cash provided by operating activities for the nine months ended November 2, 2024, was $561 million, compared to $290 million for the same period in the previous year[91]. - Restricted cash decreased to $295 million as of November 2, 2024, from $423 million on October 28, 2023, primarily due to releases of product protection reserves[96]. Capital Expenditures and Shareholder Returns - Capital expenditures are expected to approximate $750 million in fiscal 2025, down from $795 million in fiscal 2024[92]. - The total cost of shares repurchased in the third quarter of fiscal 2025 was $135 million, with an average price per share of $95.43[98]. - Cash dividends declared and paid increased to $202 million in the third quarter of fiscal 2025, up from $201 million in the same period last year[98]. Strategic Initiatives - Best Buy plans to reduce its Domestic store count by approximately 10 to 12 stores in fiscal 2025[74]. - The company is focusing on enhancing its App and in-store experiences to drive customer engagement and sales growth[67]. - The company is exploring opportunities to leverage its scale for incremental profitable revenue streams over time[70]. Interest Rate Exposure - As of November 2, 2024, the company had $0.9 billion in cash, cash equivalents, and restricted cash, with $0.5 billion of debt swapped to floating rate, resulting in a net asset balance exposed to interest rate changes of $0.4 billion[109]. - A 50-basis point increase in short-term interest rates would lead to an estimated $2 million increase in interest income, while a decrease of the same magnitude would result in a $2 million decrease[109]. Foreign Currency Impact - Foreign currency exchange rate fluctuations negatively impacted revenue by approximately $6 million in the third quarter and $25 million in the first nine months of fiscal 2025[111].

Tax Reform Implications - The returning Trump administration plans to seek more tax reforms, including making the 2017 tax cuts permanent and lowering the corporate tax rate to 15% [1] - The child tax credit is expected to be increased, while many green-energy tax breaks from the 2022 Inflation Reduction Act may be terminated [1] - Smaller cap companies in the financial, industrial, consumer, and basic materials sectors are anticipated to benefit the most from these tax reforms [1] Company-Specific Insights - **Wingstop Inc.**: The company reported a 20.9% year-over-year growth in domestic comparable sales for Q3 2024. A 500 basis points reduction in its tax rate could lead to a 6% to 7% increase in EPS [3][9] - **Post Holdings Inc.**: Generates 80% to 90% of its revenues domestically. Tax policy changes could impact its tax rate by 400 to 450 basis points, potentially increasing free cash flow by around 4% over the next three years [5][6] - **Valvoline Inc.**: Positioned to benefit from a reduction in its tax rate from 25.5% to 20%, which could boost adjusted EPS by 6% [7][9] - **BJ's Wholesale Club Holdings Inc.**: Expected to see full-year 2025 EPS estimates rise from $4.30 to $4.60 due to a 500 basis points tax cut, equating to an additional $40 million in net income [11][12] - **Hilton Worldwide Holdings Inc.**: Anticipates an increase of nearly $27 million for every 100 basis points tax rate reduction, with a potential $134 million bump in adjusted free cash flow from a 500 basis points cut [13][14] - **Best Buy Inc.**: Could see its annual tax rate drop from 24% to 19%, resulting in a 6% increase in net income and generating $93 million in cash for share buybacks and store updates [16][17] - **BellRing Brands Inc.**: A tax rate cut from 24.5% to 19.5% could lead to a 6% to 7% increase in near-term EPS, allowing for deeper reinvestment in marketing and innovation [18][19]

Best Buy (NYSE: BBY ) reported its Q3 results Tuesday morning. Its revenue of $9.45B was slightly below the consensus estimate of $9.63B, while its adjusted EPS was $1.26, below the $1.29 target. Its comparable sales growth was more disappointing at -2.9%; however, its gross margins wereHarrison is a financial analyst who has been writing on Seeking Alpha since 2018 and has closely followed the market for over a decade. He has professional experience in the private equity, real estate, and economic research ...

Today, there are a number of investors who think the stock market’s all-time highs are completely disconnected from economic reality. On the whole, the Q3 earnings season has been relatively strong: but many consumer-facing companies have warned of weakening spending, particularly for expensiveWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the them ...

Best Buy Co., Inc. (BBY) reported third-quarter fiscal 2025 results, wherein both revenues and earnings missed the Zacks Consensus Estimate. Both the top and bottom lines also declined year over year.Best Buy stock lost 2.6% on Nov. 26, due to soft quarterly results and the lowered view for the fiscal year. However, the company maintained its adjusted operating margin view.Over the past six months, this Zacks Rank #2 (Buy) company has gained 32.7% compared with the industry’s 23% growth.An Insight Into BBY’ ...

Best Buy says cautious, deal-chasing consumers and the presidential election kept quarterly sales muted.The electronics retailer released earnings Tuesday (Nov. 26) showing a 2.9% drop in comparable sales, higher than the 1% dip forecast in the company’s guidance. CEO Corie Barry said Best Buy’s sales performance was impacted by softer-than-expected consumer demand in September and October.“We attribute this to a combination of overall ongoing macro uncertainty, customers waiting for deals and sales, and di ...

Key TakeawaysBest Buy's laptop-computer sales increased 7% year-over-year for the company's latest quarter as people replaced older equipment.But shoppers at Best Buy have cut back on buying home theater equipment and other more discretionary items, the retailer's executives said.Price cuts have helped drive demand at Best Buy, but only by so much, according to Chief Executive Officer Corie Barry. Laptop demand is brisk at Best Buy, but sales are slowing for home theater equipment and other discretionary el ...

Advertisement Best Buy is bracing for Trump's proposed tariffs on imports from China and Mexico."There's very little in the consumer electronics space that is not imported," CEO Corie Barry said.Barry said consumers typically bear some of any added costs in the form of higher prices.Best Buy is bracing for the impact of Donald Trump's proposed tariffs on imports from China and Mexico — especially as the vast majority of items it sells come from the two countries.CEO Corie Barry said Tuesday during the reta ...