Wall Street has a close eye on retail sales because the economic recover cannot continue if consumers fade. So, this morning investors sent shares of Best Buy (BBY) spiking up 5-6% on earnings …
Earnings: Increased to $254 million (60 cents a share) from $158 million (37 cents a share) last year.
Revenue: Increased 2.9% to $11.34 billion.
Same Store Sales: Dropped 0.1%, but improved over the 3.9% decline a year ago.
Guidance: Increased earnings guidance and targeted annual revenue of $52 billion — a 5% increase year-over-year.
This was a good report from Best Buy. In addition to revenue and profit improvements since last year, the company has improved margins from 24.4% to 25.7% and bought back 17 million shares. The company said sales were strong for notebook computers, appliances, and mobile phones.
Given the amount of bearish sentiment regarding retail sales, looks like bears were caught off guard this morning and a short squeeze is underway:
Disclosure: No positions in stocks mentioned.