Best Buy (BBY -1.70%) is going to be in for a challenging holiday shopping season. The consumer-electronics retailer has been one of this year's hottest stocks, but it felt mortal after posting quarterly results that left the market longing for more. Revenue dipped slightly to $9.36 billion, and a good chunk of its modest same-store sales growth was attributed to a boost in its online sales. Profitability improved to $0.18 a share, but that was still a third as much as it had earned two years earlier during the same quarter.
Best Buy continues to cut costs, and passing some of those savings along to shoppers in the form of lower prices is a sound strategy. Will it be enough? Best Buy has already suggested that this will be a promotional holiday season. Consumer electronics will be discounted aggressively across retailers during this holiday season that's already shorter than usual given the late Thanksgiving this year. This results in uncertainties when it comes to margins, and that's not what investors who have been bidding Best Buy shares higher this year want to hear.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- SodaStream (SODA) is giving pop fans a new way to make soda at home. The company behind the namesake machine that turns still water into soda is now selling SodaStream Caps -- capsules with enough syrup for a liter bottle -- in this country. Pushing it down in a SodaStream cup releases the flavor.
- After the market close on Friday, it was announced that J.C. Penney (JCPN.Q) would be booted from the S&P 500. I guess even the popular market index isn't shopping at the department-store chain anymore.
- A formal probe by the National Highway Traffic Safety Association was launched into the three different fires Tesla Motors (TSLA 12.12%) drivers have experienced. The stock has gone through a fourth: a fire sale.
