(Reuters) – Best Buy Co Inc (BBY.N) is the first of many retailers that will report falling margins as merchants reluctantly cling to steep discounts to draw consumers in this holiday season.
On Tuesday, electronics retailer Best Buy saw its shares fall more than 15 percent when third-quarter earnings missed analyst expectations because of discounting.
Best Buy is the first major retailer to report earnings for a period that includes “Black Friday,” the day after Thanksgiving that marks the start of the brisk U.S. holiday shopping season. As more retailers report, more disappointing margins are expected.
“I think Best Buy is the canary in the coal mine. I think we’re going to hear retailers across all categories, with the exception of luxury, reporting depressed margin for the holiday time period,” said Joel Bines, managing director of consulting firm AlixPartners.
Over the past several days other retailers, including industry giant Wal-Mart Stores Inc (WMT.N), have said that they will see margins hit by discounting as consumers faced with high unemployment and economic
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