Tenth Straight Positive Quarter, And It Fell 7%

Best Buy's (BBY) earnings report lists trading cards as a growth driver.

Read that again…

It’s in the domestic revenue breakdown, right next to computing and home theatre.

AI glasses and trading cards.

Somebody is buying Pokemon at Best Buy in enough volume to move the numbers at a company doing $42 billion a year.

Now look at the rest of that quarter.

Revenue came in at $9.78 billion against the $9.59 billion the street wanted, with adjusted EPS at $1.47 against $1.38. Net earnings rose 69.4% to $315 million and the operating margin went from 2.7% to 4.3%.

That’s the tenth consecutive quarter of positive comparable sales. And they raised full-year guidance on both revenue and earnings.

The stock fell 7%.

I hate this trade too, by the way, but I’m going to take it anyway.

That drop was traders taking profits into good news, which is the cleanest kind of pullback there is, because nothing about the business got worse.

And the calendar is about to do the work.

Best Buy is a perennial performer from Labor Day through Thanksgiving. That’s the stretch where a consumer electronics retailer either delivers or does not, and management just told you they expect a stronger holiday season than they did ninety days ago.

$90 has rejected this stock twice since late July.

Price is back there now with more momentum behind it than either of the previous attempts, and it’s well above the 50-day at $84.02 and the 200-day at $70.31.