Best Buy Co Inc. (NYSE:BBY) stock rose 0.20% on September 6. Shares have climbed 15.7% in 2018 so far. However, Best Buy took a slight dip following the release of its second-quarter results on August 28.
There are concerns that Best Buy and other retailers could slip as the immediate benefits from tax reform windfall fade in the latter half of 2018. Best Buy’s domestic online sales rose 10.1% year-over-year compared to over 30% growth that was posted in the prior year.
The company also forecast adjusted earnings per share between $0.79 and $0.84 per share compared to the consensus estimates of $0.92.
It is important for investors not to overreact to a slight disappointment at Best Buy. Its online retail and brick-and-mortar results were both promising in the second quarter. In addition to this the stock still boasts a solid dividend yield of 2%. This does not mean that it is unwise for investors to take profits at this stage.
Retailers have benefited from a booming economy and the effects of the U.S. Tax Cuts and Jobs Act. The November midterm elections in the U.S. could bring potential political disruption in the coming months and continued rate tightening is bound to apply more pressure to consumers.
Best Buy has been a bright spot among retailers of its type but the stock is a tenuous hold heading into the fall.
