Electronics retailer Best Buy’s (BBY) shares fell sharply in price despite its recent earnings report, which topped consensus estimates. The company’s disruptions due to organized retail crime at its stores are driving down its margins led investors to retreat. Nevertheless, analysts are optimistic about the company’s growth prospects as holiday spending kicks into high gear. Will it be profitable to purchase BBY at its current price? Read on to find out our views. Best Buy Co., Inc., Richfield, Minn., is a retailer of technology products in Canada and the United States. Year-to-date, the shares have risen 11.2%. But, the stock plunged sharply last weekend despite reporting its fiscal third-quarter earnings. These exceeded expectations and increased its sales outlook in fiscal 2022. Over the past five days, the stock slumped 4.9% in price to close yesterday’s trading session at $110.95.

It was due to a decrease in gross margin that led to the share price decline. In the third quarter, its gross margin increased to 23.5% from 23.6% in the previous year. This decline is largely due to increased promotional activity as well as a negative impact from the new membership program. It also pointed out that there is more organized retail criminal activity in its stores which negatively affects its financials. “We are definitely seeing more and more particularly organized retail crime and incidents of shrink in our locations,” said Best Buy CEO Corie Barry.

However, analysts expect higher consumer spending during the holidays season. BBY will benefit. The company is expecting to earn revenue in the region of $16.4 billion-$16.9 billion during its fiscal fourth quarter. Ethan Chernofsky (Vice President of Marketing at Placer.ai), a company that analyzes foot traffic, believes that BBY will see significant growth in offline sales this holiday season. Moreover, improving its retail context and “the brand’s creative approaches to problem-solving” should enable the company to garner substantial gains over the holiday period. Matt Bilunas is Best Buy’s CFO. “We look forward to an excellent holiday season. We believe that we are exceptionally well-positioned with both tech customers and the fast and convenient methods to get it,” he said.

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