U.S. Markets shrugged off global recession woes and rallied on Tuesday, led by retail stocks Best Buy (BBY), up 12%, Dick’s Sporting Goods (DKS), up 9.29%, and Walgreen’s (WBA), up 1.79%.
The Dow Jones Industrial Average was up 260 points (+0.77%) in intraday trading, along with the S&P500 (+0.76%), Nasdaq (+0.52) and the Russell 2000 (+0.38).
Crude Oil (WTI) rebounded +2.25% after a few days of selling off to $81.75.
Bitcoin (BTC) $16,131 and Ethereum (ETH) $1,119 edged up slightly as some fears of FTX contagion subsided.
Best Buy Forecasts Smaller Drop in Sales Ahead of Holiday Season
By Uday Sampath Kumar
(Reuters) -Best Buy Co Inc on Tuesday forecast a smaller drop in annual sales than it had previously estimated, saying it was confident that a ramp up in deals and discounts will bring in more inflation-weary customers during the holiday season.
The retailer’s shares rose 8% to $76.60 in premarket trading, after it also said it had resumed its share buyback program and would spend about $1 billion for repurchases this year.
Surging prices have driven down demand for non-essential products this year, forcing Best Buy and other retailers to opt for discounts and promotions to clear excess stock of products such as televisions, laptops and other electronics.
Best Buy expects full-year comparable sales to fall about 10%, compared with a previous forecast of a decrease of about 11%.
The company, along with other retailers such as Target Corp and Macy’s Inc, expects Americans to leave their end-of-year holiday gift shopping as late as possible as they seek the best deals.
Shopping activity will be concentrated during Black Friday week, Cyber Monday and the two weeks leading up to Dec. 25, a departure from prior years when holiday shopping had been spread across three months, Best Buy Chief Executive Officer Corie Barry said, adding that the retailer was timing discounts accordingly to better manage inventory levels.
“Best Buy may be better positioned for the holiday season than other retailers,” said Jason Benowitz, senior portfolio manager at Roosevelt Investment Group.
“We expect modest growth in consumer holiday spend this year and believe many companies hold too much inventory relative to demand, while Best Buy appears to have rightsized its holdings ahead of the season,” Benowitz added.
However, heavier discounts will take a toll on holiday-quarter profit margins, Best Buy warned.
On an adjusted basis, the company earned $1.38 per share in the third quarter, beating analysts’ estimates of $1.03 per share, according to IBES data from Refinitiv.
(Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta)
Tuesday Closing Bell, November 22 (4 PM ET)
|DJIA||34,098.10 +397.82 (+1.18%)|
|S&P 500||4,003.58 -11.93 (-0.30%)|
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|Russell 2000||1,860.05 +20.89 (+1.14%)|
|Crude Oil||81.19 +1.15 (+1.47%)|
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