1 Thing That Can Kill Best Buy Co., Inc. (BBY)

We could get a glimpse of that on Thursday when Best Buy reports. The superstore operator decided to test out matching Amazon pricing during the holidays. One could argue that it wouldn’t have made the policy permanent if it was snuffing out profits in the process, but it’s hard to see this having a positive impact on the bottom line. This isn’t the kind of stuff that it can merely make up for in volume if it’s selling some items at a loss.

Another reason Best Buy’s profitability is likely to slip is that analysts have overestimated the chain’s earnings power in the two previous quarters. It’s an unwelcome trend until that’s reversed.

Hitting the register
I closed out my winning bearish CAPScall on Best Buy last week, but I am still concerned about the possibilities of a grim quarterly report this week.

The article 1 Thing That Can Kill Best Buy originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com and RadioShack. The Motley Fool is short RadioShack.

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