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Retail Renaissance Revolt: Best Buy Plunges As Top Line Misses, Cuts Forecast, Comp Stores Down And Sees Pervasive Weakness

Tyler Durden's picture





 

Is the retail revolution over? Best Buy, which was seen by many as the best indicator of retail hunger for all sorts of irrelevant Made in China Gizmos is plunging in pre-market trading, now down over 10%, after the company announces a massive top line miss of $11.89 billion in Q3 revenue on expectations of $12.45 billion. We can't remember when a retailer had a nearly 5% miss in top line, and is certainly a major cause of concern for not only the retail renaissance but for... Apple, for whom the store is the second biggest seller. Some other horrendous data points: Q3 comp sales down 3.3%; domestic Q3 comp sales down 5.0%, the company sees year EPS USD 3.20-3.40, saw USD 3.55-3.70, vs. Exp. USD 3.59, and notes domestic sales were softer than expected (as if it wasn't obvious). Broader market futures are also moving lower on the news that the market has managed to extract as much as it could out of a consumer base that is no longer paying its mortgages. Incidentally, how this could be a surprise is stunning: on October 31 we wrote that "TV pricing bloodbath threatens already razor-thin retailer margins" - of course, what is obvious to some, is completely opaque to the robots who only focus on positive headlines news. Perhaps a number for RenTec to tweak that algo a little?

And, as always happens when reality strikes, here is another sellside analyst whose opinion is now completely irrelevant. Meet Oppenheimer's Brian Nagel.

 


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Tue, 12/14/2010 - 09:09 | Link to Comment Aknownymouse
Aknownymouse's picture

BANG DAE HO BITCHZ

Tue, 12/14/2010 - 09:17 | Link to Comment Aknownymouse
Aknownymouse's picture

Also for additional comic relief.  This Kramer's take on BBY BEFORE earnings:

 

Best Buy (BBY) reports on Tuesday. Cramer expects the company to beat estimates and raise guidance as it did in the previous quarter. Corning's (GLW) bullish comments on large screen TV sales are a good tell for Best Buy.

Tue, 12/14/2010 - 09:30 | Link to Comment Rick64
Rick64's picture

 Cramer expects the company to beat estimates and raise guidance as it did in the previous quarter

Thats the best short indicator of all.

Meanwhile GM trying to get rid of 2400 workers and Yahoo looking to layoff 5% of its workforce. 

Tue, 12/14/2010 - 10:00 | Link to Comment 101 years and c...
101 years and counting's picture

TJX going to layoff 4,400 people.  They used to wait until after xmas and new years to lay off people.  not anymore.  as people like to proclaim:  welcome to the new normal.

Tue, 12/14/2010 - 11:58 | Link to Comment DosZap
DosZap's picture

This is not uncommon, been happening as long as I can remember.

Companies wonder why people LOSE it, and go on rampages.Well here is one reason, do it at the most illogical time of the year.

When employees NEED money for Xmas, and Thanksgiving, lordy, talk about depression,anxiety, and anger.

And, the thought of finding new employment in winter, and in a Depression to boot.

Its ALL about the bottom line.

Tue, 12/14/2010 - 14:29 | Link to Comment trav7777
trav7777's picture

best bet is to opt out of the commercial Xmas.

Also, every laid off worker needs to understand that their former salary is to be divided up amongst the execs earning 200x what they used to make.

Execs make their own bonuses out of the salaries of former rank-and-file.

Tue, 12/14/2010 - 15:53 | Link to Comment Rick64
Rick64's picture

++ opt out.

Tue, 12/14/2010 - 09:25 | Link to Comment El Hosel
El Hosel's picture

  Get back Best Buy, 60 daily candles.... buy buy

   http://www.youtube.com/watch?v=GCWflM6LXjU&feature=related

Tue, 12/14/2010 - 10:48 | Link to Comment Vergeltung
Vergeltung's picture

that's funny. why would someone junk that? I don't get this place sometimes......

Tue, 12/14/2010 - 09:14 | Link to Comment papaswamp
papaswamp's picture

I'm sure this will be seen as another 'fluke'....all is well rally on.

Unnoticed by the market is the Asian sector is beginning to crumble..Australia and Japan with ugly numbers.

Tue, 12/14/2010 - 09:14 | Link to Comment Sophist Economicus
Sophist Economicus's picture

But, but, but Harry says retail is booming and he's hiring 9 people in Wisconsin....

Tue, 12/14/2010 - 09:30 | Link to Comment jus_lite_reading
jus_lite_reading's picture

Hairy Wanker sells homemade porn, of his mother. Hot stocking stuffer you know.

Tue, 12/14/2010 - 09:17 | Link to Comment putbuyer
putbuyer's picture

LULU looks like a good short here

Tue, 12/14/2010 - 09:19 | Link to Comment Spitzer
Spitzer's picture

Anyone who is dumb enough to own retail deserves a beat down.

Tue, 12/14/2010 - 09:20 | Link to Comment Dapper Dan
Dapper Dan's picture

With Circuit City out of the way I really thought Best Buy would do very well this year.

Things  aren't like they were, that is an understatement, and I am unanimous In that.

Tue, 12/14/2010 - 17:09 | Link to Comment RockyRacoon
RockyRacoon's picture

Is there really all that much that you can/could get at Circuit City and Best Buy that you can't get at Walmart or Target?  Really?  I've been to Best Buy a bunch and there isn't much I want of a specialty nature that's not available by internet sales sites.   All that crap is pretty much generic now.

Tue, 12/14/2010 - 09:25 | Link to Comment Cdad
Cdad's picture

Curiously, and after sensing that I was going to be more lucid today having slept well with visions of PE compression and non GAAP accounting dancing in my head, my post as such disappears into the same thin air where all of Best Buy's earnings also obviously went.  So either I am not well again, or something technological just happened that is very interesting but, again, is beyond my power to explain.  But never mind about that because I have a hard time explaining lots of things.

I was saying that CNBC, despite constant Black Friday Madness programing was, curiously enough, wrong again about retail sales.  Oddly enough, and despite endless replays of Black Friday trampling from 2006, folk just could not pony up for $1000 televisions at BBY.  Shocking!  Something about buying food instead, I expect.

But worry not indexers because I do expect talking heads to suggest that both gold and silver are the S&Ps bff...which is good because Mr. Market has already seemingly figured out [finally] that oil is most certainly NOT the S&Ps bff.

Good luck out there.  I'm sure people smarter than me will have a good spin for what plunging share prices really means for BBY.

[and presto...there you go...."more share" and already this is an "outlier."  Thank the lord for the criminal syndicate known as Wall Street and its perpetually counter intuitive responses to everything.]

Tue, 12/14/2010 - 09:29 | Link to Comment Cursive
Cursive's picture

Oddly enough, and despite endless replays of Black Friday trampling from 2006, folk just could not pony up for $1000 televisions at BBY.  Shocking!  Something about buying food instead, I expect.

I was at the Mall of Louisiana this weekend and was shocked at how sparse the crowds were.  This was from 11 AM to 1 PM and the Saints game was a 3 PM start.  Of those walking around, I saw very few bags.  And the shelves were full of merchandise.  Of course, 87 octane ranging from $2.89 to $2.99 a gallon may have put a crimp on some people's discretionary spending.

Tue, 12/14/2010 - 09:33 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Exactly.  I've seen a lot of people at stores lately but very little buying.  Perhaps the unemployed are taking their kids to Walmart to play with the toys.

Tue, 12/14/2010 - 09:40 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Sadly, LOL

Tue, 12/14/2010 - 09:48 | Link to Comment Cdad
Cdad's picture

You have to learn to look on the Wall Street side of things...which is to say that just as soon as people start starving and freezing to death this winter, lower retail sales will result in less demand for products which will result in lower prices.

Unfortunately, and because the criminal syndicate known as Wall Street responds counter intuitively to EVERYTHING [arbitraging to death every single thing on the surface of the planet], prices will first spike with hyperinflation despite the death rate and fewer consumers...

But we'll all get through it together.  Don't buy a tv...buy mason jars.

Tue, 12/14/2010 - 11:59 | Link to Comment ElvisDog
ElvisDog's picture

Explain to me how hyperinflation occurs with stagnant wages and rampant unemployment. How exactly do I get the $1 billion dollar bill to buy that egg I've had my eye on.

Tue, 12/14/2010 - 15:04 | Link to Comment jus_lite_reading
jus_lite_reading's picture

The same as we get "green shoots" and a "jobless recovery" with 25% unemployment, that's how.

Tue, 12/14/2010 - 09:51 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Probably at Walmart just to stay somewhere warm.  I know I just spent $305. for one month of Heating Oil and I have a small House.  That $305. will put a crimp in my spending this Holiday.

Tue, 12/14/2010 - 09:59 | Link to Comment countryboy42
countryboy42's picture

I was at Gander Mountain on Sun. While waiting for my back ground check to be completed, I walked around observing other shoppers. Most people were looking at guns and buying ammo. Very few people were looking at clothes.

20 min. later, I walked out with my new Rock River Arms LAR-15 and a new O/U Stoeger Condor 12 guage shotgun. At least I can hunt, until they try to clamp down on that.

Buy bulk when you can. I am going to harvest a bison next month, and spliting it with 2 other people. $200 for my share which will give me 200# of meat. $1 per pound! Yeah, I gotta process it, but so what? Between the 2 antalope I shot, the bison, and pheasant hunting, I won't have to go to the store for meat this year. Grow some veggies, can the extra, and I am set for the year, sorta.

Good luck out there, and keep your powder dry.

Tue, 12/14/2010 - 11:46 | Link to Comment SilverRhino
SilverRhino's picture

Got a link or contact info for that buffalo rancher?   Enquiring minds and such.  

Tue, 12/14/2010 - 13:14 | Link to Comment countryboy42
countryboy42's picture

Friend of a friend of a friend near Fairplay, CO. 1 yr. old cow for $600-$700 plus $50 to skin and quarter it. You even get to keep the robe, but it costs to have it tanned. I might keep it though, might have to start building teepees soon.

If I get more info soon, i'll post it. Not sure how many animals they harvest each year, so i'll ask.

Keep your powder dry.

Tue, 12/14/2010 - 13:47 | Link to Comment SilverRhino
SilverRhino's picture

Thanks.  Sounds something like these guys.

http://www.bluemtnbison.com/ 

I LOVE buffalo meat if only for the fact that it is twice as filling so that 16oz bison steak will put you in a nice meat coma.  :)

Tue, 12/14/2010 - 10:05 | Link to Comment A Man without Q...
A Man without Qualities's picture

Over in Germany this year is very unusual.  Many high end retailers already starting their January sales 2 weeks before Christmas, but the sale discounts are much larger than normal, with 50% off not uncommon, whereas usually 20 - 30% off is as much as can be hoped for.

 

Tue, 12/14/2010 - 10:18 | Link to Comment RunningMan
RunningMan's picture

I was at my local mall (for a haircut, mind you), and the retailers said lower foot traffic and much lower sales relative to last year. I've straw polled them for several years just out of curiousity, and the feedback has correlated well with holiday sales.

Tue, 12/14/2010 - 10:36 | Link to Comment Almost Solvent
Almost Solvent's picture

I was in our local Best Buy last week to pick up our Christmas present (DINK household so we splurged on a $999 55" 1080p Panasonic plasma).

 

I ordered online to get my UPromise credit and picked it up. What I saw on Sunday 12/5 around 3pm was 4 empty checkout lines, but standing room only for the 2 return lines.

 

There must have been 20 people in the 2 return lines and I counted only 3 people buying things during the 20 minutes it took to get my TV. And those 3 people were buying little items, not big screen TVs.

Tue, 12/14/2010 - 12:03 | Link to Comment ElvisDog
ElvisDog's picture

I think we need to consider that, like housing, big screen TV's may have reached saturation. Everyone who wanted one or could afford one already has one. Retailers may be faced with a replacement-only dynamic that means flat to slightly increasing sales.

Tue, 12/14/2010 - 12:23 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Lots of Tiffany bags on 5th Avenue, and few Best Buy bags on Main Street?

Things are only truly restructured with a bang, not a whimper.

And I've yet to hear Bang Dat-Hoe's drum.

Tue, 12/14/2010 - 09:24 | Link to Comment Biggus Dickus Jr.
Biggus Dickus Jr.'s picture

Other sales channels are stealing market share. Big box electronics will go the way of the dodo. Their profit always depended on selling expensive insurance policies.

Tue, 12/14/2010 - 12:14 | Link to Comment RKDS
RKDS's picture

Big box electronics are a joke anymore.

One upon a time, you went to these specialty stores to find stuff KMart didn't have room to carry.  Now they have about the same lousy selection with a 10% markup to boot.  The internet isn't killing them, this is willfull suicide as far as I'm concerned.

I tell you, I have no idea how Radio Shack holds on.  They didn't even have computer hard drive screws the last time I was in there.  Half the store is the same damned phones I can get from my carrier at contract renewal.  I ended up paying $5 to ship $1 worth of screws from a NewEgg warehouse in NJ.

I really try to cut B&M some slack but as gas prices rise ever higher I can't afford to keep driving around only to come home with nothing.

Tue, 12/14/2010 - 12:26 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Sears Holding was Eddie Lampert's little stealth REIT, and now that commercial real property values plunged, and he can't sell the earth beneath his stores, he's working on Plan B or C.

Tue, 12/14/2010 - 17:15 | Link to Comment RockyRacoon
RockyRacoon's picture

Our local Radio Shack just "remodeled".  Bad move.  All the tinkerer stuff is gone.  No rolls of wire, contacts, work boxes, solder/irons, resistors, capacitors, switches, etc.   They said I could get all that on their internet sales site.   I like to build/modify my own stuff but now I gotta find a more convenient source -- unlikely.

Tue, 12/14/2010 - 22:33 | Link to Comment StychoKiller
StychoKiller's picture

www.digikey.com or www.mouser.com carry just about everything.

Wed, 12/15/2010 - 01:18 | Link to Comment TruthInSunshine
TruthInSunshine's picture

rocky - meritline has about 1000x the inventory of the gears, wire, switches and widgets RS ever dreamed of stocking, and at about 20% of the price or less.

Tue, 12/14/2010 - 09:24 | Link to Comment Kromme Vinger
Kromme Vinger's picture

Could this company's results be more adversely affected by forex mis management than most?

Tue, 12/14/2010 - 09:26 | Link to Comment Aknownymouse
Aknownymouse's picture

CNBC: BBY results is an outlier.  So the Employment numbers were a one time event.  BBY numbers are outliers.  EVery bad news is an execption.  It looks like S&P will see an an outlier value of 200 soon.  One time event that means nothing at all.  Don't you worry.  CNBC SUX

Tue, 12/14/2010 - 09:28 | Link to Comment Cdad
Cdad's picture

Yep, we think alike.  Down is the new up.  Black is the new white.  And now we are supposed to buy buy buy...which is anything but what retail shoppers obviously did at Best Buy.

I get the feeling someone out there thinks I'm a sucker.  I'm not sure why they would think that, but they seem to.

I remain on guard, and I hope you do, too.

 

Tue, 12/14/2010 - 09:27 | Link to Comment jus_lite_reading
jus_lite_reading's picture

It's part of the "wealth effect"

There comes a time in an empire (EU/US/UK) when commercialism breaks down. No matter how much a person is made to believe that he "NEEDS" the latest thingamabob, whatever that might be, he simply can't buy it...

Game over.. notch 31

Tue, 12/14/2010 - 09:26 | Link to Comment kridkrid
kridkrid's picture

For those who have opted out of watching the video... do yourself a favor and watch.  This fat-faced kid is playing a game of pretend.  It's kind of how my 5 year old like to play school, only I would say my 5 year old is a little bit better at it.  

The whole group was playing pretend, actually.  Let's pretend to play TV.  I'll be a host, you be an expert on electronic devices and retail.  Try not to look too fat!.  

Tue, 12/14/2010 - 09:32 | Link to Comment jus_lite_reading
jus_lite_reading's picture

He makes a  strong case: Never trust the anal-cysts.

Tue, 12/14/2010 - 09:33 | Link to Comment Rick64
Rick64's picture

Paid actors.

Tue, 12/14/2010 - 09:42 | Link to Comment kridkrid
kridkrid's picture

Likely even worse.  Right now fat face is thinking, "man... I can't believe how bad I missed that... I really thought I had it right when last week I walked into a Best Buy and saw someone buy a iPhone and another dude looking at a flat screen TV.  I am so totally screwed.  I'm sure I'll lose my job".  He shows up today and nothing has changed.  He even gets a compliment or two regarding his appearance.  He's too dumb to know what's going on.

By the way... anyone else getting blasted by Best Buy ads in this thread?  Too funny.

Tue, 12/14/2010 - 09:27 | Link to Comment snowball777
snowball777's picture

Sorry "Best" Buy...I had to spend it all on grains and gas.

Tue, 12/14/2010 - 09:28 | Link to Comment jbc77
jbc77's picture

Anyone surprised the the futures have barely moved lower on this news. Best Buy conitues to get hammered pre-market and the S&P is barely moving lower. What a fucking joke guys.

Tue, 12/14/2010 - 09:32 | Link to Comment Cdad
Cdad's picture

That is because gov't approved retail sales just came out and countered the BBY numbers.  And we all know how trustworthy gov't numbers are.

So...do what you will...which is exactly "I don't know."  Maybe stock up on Chunky Soup?

Tue, 12/14/2010 - 09:36 | Link to Comment the not so migh...
the not so mighty maximiza's picture

"Best Buy continues to get hammered pre-market and the S&P is barely moving lower. What a fucking joke guys."

 

The government manipulation dudes and dudettes are stuck in traffic, icy roads and snow.  As soon as they get in we will get some rythmes going.

Tue, 12/14/2010 - 09:39 | Link to Comment Dixie Normous
Dixie Normous's picture

One thing is for sure, if the S&P futures start to move lower the dollar will be slammed.

Tue, 12/14/2010 - 09:41 | Link to Comment Cdad
Cdad's picture

Yes...because the criminal syndicate known as Wall Street is actually incapable of making ANYTHING, they build a rally by debasing the currency...on which we all depend...to transact...eat...and secure engergy.

Great!  Rock on syndicate!

Tue, 12/14/2010 - 12:30 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Someone has to rape, pillage and steal, with the full force and backing of government (and the Federal Reserve cabal), or history books 20 years from now would have blank chapters.

Tue, 12/14/2010 - 09:32 | Link to Comment watmann
watmann's picture

With a real 20% unemployment and unknown issues remaining how should the consumer react? They are doing exactly what one would expect. They are cutting back.

 

The real issue for retailers is that the EPS numbers they are reporting come in large part from expense savings and sucking marketing funds from suppliers. This can only last so long.

Tue, 12/14/2010 - 09:33 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Best Buy is the next Circuit City, Comp USA, etc etc

Tue, 12/14/2010 - 09:38 | Link to Comment Groty
Groty's picture

Margins have peaked this cycle.  China tightening monetary policy.  European debt crisis restricting credit.  CSCO disappointed.  BBY blew chunks.

Everyone thinks the market can't correct until January because the performance chasers will push it up.  What happens if the performance chasers finally confront reality and pull bids?  10%-15% down swoosh could come in next two weeks rather than in January as everyone believes.

Tue, 12/14/2010 - 09:40 | Link to Comment pat53
pat53's picture

The market could care less about Best Buy, SPX to 1250 by weeks end, probably sooner, possibly today

Tue, 12/14/2010 - 09:40 | Link to Comment Spartan
Spartan's picture

Just remember...buy the dip...

Tue, 12/14/2010 - 09:41 | Link to Comment Cdad
Cdad's picture

Right...dip and chips and more Chunky Soup...'cause soup is good food and it is getting quite cold outside just now.

Tue, 12/14/2010 - 09:42 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

When the Banks increased their Credit Card Rates to 29% most People just defaulted.  Those People now do not have any credit.  It is pay as you go.  Plus, how many declared Bankruptcy because of underwater houses and unmanageable Debt.  Again, Consumers no longer have any credit.  No, equity loans for consumption with credit scores down and underwater houses.  It is starting to show up in Consumer Sales.

Back to the old days where you would save for a large purchase.

Again, blame the Banks.

Tue, 12/14/2010 - 10:00 | Link to Comment ella
ella's picture

Default...the perfect result from usury.  The consumer is far better off paying cash, it is some much cheaper than usurious interest rates.   

Tue, 12/14/2010 - 09:43 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

In another positive development; while shopping this weekend..the clerks at Liz Claiborne told us that all their outlet stores are closing, LL Bean just closed one next door at

a delaware outlet mall that was not very crowded ..green shoots

Tue, 12/14/2010 - 09:51 | Link to Comment chinaguy
chinaguy's picture

AP - on today's "better than expected" Retail numbers - Enough, but not too much

However, it will probably not be strong enough to discourage the Federal Reserve from completing its $600 billion government debt buying program intended push already low interest rates further down and stimulate demand.

LOL


Tue, 12/14/2010 - 09:52 | Link to Comment Caveman93
Caveman93's picture

I bought my Gen 5 iPod at a hock shop and spent the rest on silver, ammo and food. No surprise from me here! Best bye-bye has a Monopoly on tech goodies since CircutCity went under so this is absolutely hilarious to me!

Tue, 12/14/2010 - 10:02 | Link to Comment jus_lite_reading
jus_lite_reading's picture

I buy nothing new. I not only limit my impact on the environment, I'm not sending my money to China, I'm keeping the money out of the bankstas hands, I'm saving money which is being used on supplies and gold/silver and barter items. Few will survive the winter of "K"

Tue, 12/14/2010 - 09:54 | Link to Comment Ted K
Ted K's picture

Nagel: "I observe people in the aisles."

Pathetic.  Any chance these liars invited to bring their pompoms on CNBC will lose their jobs as retail investors quit buying???  Or still enough losers who think ETFs with garbage stocks and ETFs fucking people with fees and arbitrage will keep these guys with the "pimp" neon sign on their forehead forever employed?????????  

Tue, 12/14/2010 - 10:04 | Link to Comment jus_lite_reading
jus_lite_reading's picture

I too observe the sheeple. I notice more window shoppers than ever- empty hands, full malls. They are full because it's a cheap place to hang out- "Lot's goin' on" and it costs nothing. Mostly teenie boppers "hang out" at the mall. Few real shoppers.

Tue, 12/14/2010 - 09:55 | Link to Comment Caveman93
Caveman93's picture

I should post a pick of the ACE Hardware store which just closed on Saturday. The "ACE" sign is gone, all the doors have wrapping paper on the inside and two lonely Christmas Holiday wreaths stand out front. Fucking depressing.

Tue, 12/14/2010 - 10:02 | Link to Comment TWORIVER
TWORIVER's picture

If we see any selloff today, it will likely come after 2:15 and the Fed release.

Tue, 12/14/2010 - 10:04 | Link to Comment ella
ella's picture

Electronics for most is a purely discretionary item.  If the consumption is contracting then discretionary spending will contract the most.   Costco (at least for computers) is a better deal with their extended warranty and membership life support.  Best of all the support is on shore and most of the techs actually know what they are doing. 

Tue, 12/14/2010 - 10:08 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

You also have to take into account the amount of people just getting by on Unemployment Insurance, the Seniors that are getting .005% interest on their savings. The high cost of Heating Oil, Gas.  I know I was thinking about going to a Store that is about 15 miles away and decided not to go because of the cost of the Gas.  It was not worth the savings on the item I wanted to buy.

Tue, 12/14/2010 - 10:08 | Link to Comment Silverhog
Silverhog's picture

I can't believe how many small and larger stores have closed near me in the last 6 months. I guess this is all part of the recovery. As all this conflicting economic data is only proving that this is one screwed up economy. Thank you Ben.

Tue, 12/14/2010 - 10:21 | Link to Comment No Mas
No Mas's picture

Wow, such a shocking story to see that BBY reports an operating loss.  Very strange indeed during this recovery.

Hold on now!!  Wait just a minute!!!  You're telling me that BBY DID NOT LOSE MONEY???  They made money, they're profitable just not to the level of expectations? 

Get back to me when they are losing money.  That's when I'll buy the retail world is ending nonsense.

And of course, the day traders among us will work with this equity today, long and short as needed.  If the PTB use this as a reason to generate a pull back on an index, remember the mantra:

Buy the f*****g dips.  So much liquidity and so little time.

Oh and I see that retail sales are up today, so BBY may actaully be an outlier.  But of course the retail report is government generated so it must be a lie.

Merry Christmas to all! 

Tue, 12/14/2010 - 10:23 | Link to Comment Cdad
Cdad's picture

Yep, nice work there.  You got it.  It all has to go up before it all goes down.  Part of the whole arbitrage the crap out of everything until everything is dead...having first, of course, monopolized the coffin sector. 

Carry on then...

Tue, 12/14/2010 - 10:27 | Link to Comment SheepDog-One
SheepDog-One's picture

YOU but the fuking dips, NoMas! I'll bring the chips!

Tue, 12/14/2010 - 11:20 | Link to Comment firstdivision
firstdivision's picture

Ahh, but we are starting to see is a margin collapse.  Retailers know that they cannot raise prices as quickly as the inputs have risen lately and are trying to slowly build it up so the consumer doesn't know (like a frog in a pot of water on a stove).  If inputs keep increasing like they have (same with consumer staples), then that puts a lot of companies in a squeeze.  Then the consumer will go back in the bunker and only buy neccesities.  If wages do not start to increase, I have no clue what retailers will do come March. 

Tue, 12/14/2010 - 11:43 | Link to Comment Cdad
Cdad's picture

Very astute.  Indeed, this is why it is a good idea to short $9 burritos...because I don't think anyone is going to get out of that particular room...alive anyway...especially not on the weak answer to the problem of commodity input cost from the syndicate which has answered this problem specifically with the words "pricing power."  They think that is a given...on a burrito that is already $9.

First the input costs, and then later the rents outside of malls that are mostly empty...or closed.

We think alike, indeed.

Tue, 12/14/2010 - 11:57 | Link to Comment firstdivision
firstdivision's picture

Wow, I haven't been to a Chiptole for a few years now.  Last time I was there a burrito was $6. 

Tue, 12/14/2010 - 15:07 | Link to Comment jus_lite_reading
jus_lite_reading's picture

>>"Ahh, but we are starting to see is a margin collapse."<<

 

Ahh, A&P anyone?

Tue, 12/14/2010 - 10:29 | Link to Comment Dexter Morgan
Dexter Morgan's picture

I knew Best Buy was doomed when they tried to charge me $33 plus tax for the cable that goes from my printer to computer.  (There was no price tag so took to checkout.  Girlfriend moved out and took cord).  I went to Goodwill and got the chord for $1.99.  Now if I had only shorted them.

 

Tue, 12/14/2010 - 10:38 | Link to Comment TonyV
TonyV's picture

I buy all my computer parts and electronics online now. You can't beat the price an convenience.

Tue, 12/14/2010 - 11:54 | Link to Comment firstdivision
firstdivision's picture

I've bought all my comp parts and various cords from newegg.com since 2001.  Last time I went to buy a cord at Best Buy, I looked at an HDMI cord and they wanted $60.  I bought the same cord (different brand of course since Monster really is cheap crap) for $8 w/shipping.  BBY is going the way of the doodoo.  I also believe that most of your public traded companies will actually start to implode as their only priority is to meet these insane guidence to boost stock prices.  Privately held companies will fare better in that they don't need to be told what they need to make to levitate a share price. 

Tue, 12/14/2010 - 13:58 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Seriously, you can get all the quality in HDMI cable for $2 or $3 online, and they're made in the same Chinese factories that make the ones Best Buy sells for $20.

Brick & Mortar Retail is waking up to some brutally cold consumer shifts.

Tue, 12/14/2010 - 11:46 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Harry, Harry, Where do you go when the lights go out?

Tue, 12/14/2010 - 11:43 | Link to Comment sbenard
sbenard's picture

I'm surprised to see Best Buy struggling. They must have taken a big leap in market share when Ciricuit City went belly up. This is not a good sign for the direction we're headed!

Tue, 12/14/2010 - 11:46 | Link to Comment Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Here in the DC area, electronics/appliance retailer HH Gregg snapped up a few of Circuit City's most choice former sites.  Have spent some time in their stores here, which opened up a few months ago, and I have the feeling they are not off to a good start in this market.

Tue, 12/14/2010 - 12:34 | Link to Comment RKDS
RKDS's picture

My experience in PA has been the same...HH Gregg is no replacement for CircuitCity unless the only electronics you ever buy are TVs and washing machines.  BestBuy is better but that's not saying much.  They didn't even carry A/V selector boxes (neither did the Radio Shack next door) so I had to go to Target of all places for what should've been a super trivial TV accessory.

Tue, 12/14/2010 - 14:02 | Link to Comment TruthInSunshine
TruthInSunshine's picture

When does whatever money that is behind the lifeless carcasses known as Radio Shack & Rite-Aid take their pain?

Is The Ben Bernank & The Brian Sack bailing their asses out, too?

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