The Motley Fool Previous Page


It's a Holiday Horror Show for Some Stocks

http://www.fool.com/investing/general/2012/11/20/its-a-holiday-horror-show-for-some-stocks.aspx

Alyce Lomax
November 20, 2012

The drive to get the holiday consumer spending party started has begun earlier than ever. Halloween was barely wrapped up before Christmas swag showed up in many stores, and Black Friday has not only been moved to Thursday in many cases, but the buzz has been building all week long.

Several retailers are starting the season off even more desperately than with early come-ons: They've already delivered coal for investors' stockings before the real battle has even begun. Beware.

Worst buy
Best Buy
(NYSE: BBY  ) is the latest retailer to show that it's on seriously shaky ground as the holiday shopping season commences. New CEO Hubert Joly conceded the results were "clearly unsatisfactory" (investors agree) and they "strengthen our sense of urgency and purpose."

The retailer reported a net loss from continuing operations of $13 million, or $0.04 per share. Back out a restructuring charge, and Best Buy's profit was $10 million, or $0.03 per share. However, ponder the fact that last year this time, Best Buy reported fiscal third-quarter profit of $173 million, or $0.47 per share. In other words, this quarter's results have literally fallen off a cliff.

Domestic revenue fell 4.7% to $7.7 billion, and same-store sales fell 4%. Although online sales increased by 10%, that only adds up to $431 million in sales -- a drop in the proverbial bucket.

More "blue Christmas" stocks
Best Buy isn't the only stock investors might not want stuffed in their holiday stockings. J.C. Penney (NYSE: JCP  ) continues to flail. Although much was made of its hiring of former Apple (Nasdaq: AAPL  ) executive Ron Johnson, Penney's shares have been decked by disappointment.

The retailer recently reported a staggering quarterly loss of $203 million, or $0.93 per share. Same-store sales plunged 26%. Johnson may believe he can transform the department store into a