Dallas, Texas 01/30/2014 (FINANCIALSTRENDS) – Best Buy Co. Inc. (NYSE:BBY) is seemed to be going down the hill as its growth and turnaround story fizzes out. The company had made an impressive performance during the year 2013 which led its stock prices to soar by nearly four-fold. But, its lackluster quarterly earnings and sales data sent it back into the red zone.
High Competitive Environment
Best Buy’s sales, revenue and its earnings had completely went down during the quarter in comparison to what it was in the previous quarter. Even the holiday season sales didn’t do any good to the company as the sales during this time tumbled.The company was disappointed that even after lining up an array of promotional activities and bringing heavily discounted products on the shelf, the sales did not happen.
Rather, they acted like as a catalyst to push the cost for the company higher. The presence of online retailers, most particularly, Amazon is making the existence of Best Buy more difficult.
The CEO of the company, Hubert Joly, has taken some crucial steps, including the cost cutting measures in order to keep the business revenues flowing amid the tough competition environment in the presence of other online retail giants, But, he has still a long way to cover in order to form his company resourceful, well-organized and capable of generating profits and revenues higher than the expectations of its shareholders. The recent quarterly sales have not so far produced any encouraging results for his actions.
The company has been subjected to more downgrades as well. The recent blow comes from Goldman Sachs, which has downgraded it from “buy” to “neutral”. The analyst at Zack have followed the suite. These revisions mean much more to the company as it had already mentioned in its annual report that any rating downgrade from the analysts would make it more difficult for the company to gain adequate financing.