Early Credit Card Data Show Consumer Electronics Sales May Slip in Q4
An early look at some of the credit card spending data from the holidays has delivered some unfavorable news for the consumer electronics and toy retail industries. According to a Bank of America Merrill Lynch (BAML) report, spending was down 6 percent on consumer electronics and toys in November, which would represent the single biggest recorded drop in spending on those categories in the last few years.
The news was buried in a note in which the firm downgraded its outlook on Best Buy to ‘sell.’ That news sent the consumer electronics retailer’s stock down 5 percent on Monday morning, though it’s slowly climbing it’s way back as of this report on Tuesday morning.
Specifically, the firm cited “deceleration in industry growth trends and continued caution on key product categories such as TVs, Apple products, and gaming,” as analyst Curtis Nagle wrote in the note. “We are turning more negative as we now see a higher possibility that BBY may see an outright comp miss in 4Q and we believe Street 2019/20 EPS [estimates] are too high.”