Best Buy Co Inc (NYSE:BBY) shares are down 6.3% at $70.71 this morning, reversing their morning gains even after the electronics retailer beat second-quarter estimates with earnings of $1.28 per share on revenue of $9.44 billion. While the Minnesota-based company posted strong sales during the 13-week period ending Aug. 2, rising prices, ongoing tariff concerns, and its earlier decision to slash its product outlook are tempering optimism ahead of the back-to-school and holiday seasons.
Should today's woes continue, it would mark the the fourth-straight post-earnings slump for BBY as the stock looks to snap a three-week win streak. It would also be the stock's worst session in just over a month, extending its year-to-date deficit to 17.5%. Long term, the equity has been struggling with pressure at the $75 level since mid-March.
Best Buy's performance today signals a sharp turnaround from where call traders expected the stock to land following its digital marketplace launch just last week. Analysts have been much more bearish, with 15 of the 23 firms in coverage rating it a "hold" or worse.
Options activity reflects this sentiment shift, too, as 11,000 puts have been traded -- five times the average put volume seen at this point -- compared to 7,863 calls. The November 70 put is drawing the most attention, followed by the weekly 8/29 70-strike put, with new positions opening at both.
