Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Best Buy (NYSE: BBY ) fell off a cliff today, ending down 29% as the company reported disappointing holiday sales.
So what: In an update ahead of its official earnings report in February, the big-box retailer said domestic same-store sales declined 0.9%, and said it expected operating margins to fall by 175 to 185 points. While that was far from the worst report to come out of the retail industry during the last couple of weeks, it jolted investors, who had pumped up the stock on a supposed turnaround. CEO Hubert Joly cited the extremely promotional environment over the holiday season for the offbeat performance.
Now what: While the electronics retailer has made strides under Joly, cutting costs and revamping the stores through partnerships with Samsung and other major brands, the company still seems to be operating at a structural disadvantage against the likes of Amazon.com and a shifting retail environment. Given that imbalance, it seems hard to bet on the retailer long term. Today's fall seems nothing more than an unsurprising correction for a stock that had more than tripled in the last year.
Two retailers you need on your side
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform, and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.