A police officer wearing a mask is sitting on guard at a store.
It was.
Best Buy said that an increase in retail theft is hurting its profit margins.
Best Buy CEO Corie Barry said that they are seeing more organized retail crime.
The retailer reported third-quarter earnings that beat analyst estimates.
Best Buy's shares fell as much as 17% on Tuesday after the electronics retailer said an increase in organized retail theft is hurting its profit margins.
The retail burglaries, which are recorded and shared on social media by onlookers or store associates, involve a rush of dozens of people into stores, grabbing as much product as possible, and then running out. The Best Buy store is an attractive target due to its large inventory of high-priced electronics that can be found in small sizes.
Best Buy CEO Corie Barry said in the company's third-quarter earnings call that they are seeing more and more organized retail crime. Shrink is a code word for loss of inventory due to theft. Barry said the company is taking measures to stem the thefts, including hiring security guards and locking up certain products.
Best Buy's gross margin was slightly below analyst estimates. Barry said that retail theft pressure in our financials. According to the earnings call, promotional activities, higher prices, and supply chain disruptions were hurting Best Buy's profit margins.
Barry's comments that holiday sales may have been pulled forward due to consumer concerns about supply chain issues could be one reason for the steep decline in Best Buy's stock price on Tuesday.
Best Buy reported third-quarter revenue and earnings that beat analyst estimates. The retailer raised its FY21 revenue guidance to $52.3 billion from a previous range of $51 billion to $52 billion. Revenue is expected to be $51.8 billion.
Markets Insider.
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