“The macro environment grew more challenging after the holidays. Our post holiday results are not going to be what we originally expected.”
– Jim Muehlbauer, Best Buy Enterprise CFO (interim)
The stock that probably colored the market action today the most was Best Buy (BBY). They came out before the open and said that based on lower than expected revenues in January, they are lowering their full year profit forecast to $3.05-$3.10 from $3.10-$3.20 (for the fiscal year ending March 1, 2008). That’s a decent sized reduction given that it was only a month ago that they gave the previous forecast.
Best Buy shares were down 2.5% on heavy volume.
Chipotle Mexican Grill (CMG), the wonderful fast casual mexican restaurant with a Roseville/Granite Bay location on the corner of Douglas and Sierra College Boulevard, missed EPS estimates by a penny and just met revenue expectations when they reported 4th quarter earnings after the close yesterday (CMG 4Q Earnings Release).
That’s not good enough for a stock with as much optimism built into it as Chipotle. Shares opened down about 11% but rallied throughout the day as a number of analysts affirmed their bullish outlooks for Chipotle and a lot of shorts probably covered the heavily shorted A Class securities (41% of the A Class shares were sold short as of 1/31/08).
Shares ended down only 3% at $105 on heavy volume. With a 40% correction over the last 7 weeks, the selling is probably over in Chipotle for the short term.
Finally, Comcast (CMCSA) made another impressive 5% up move, on strong volume, continuing to rally after yesterday’s strong earnings and shareholder friendly initiatives.
Disclosure: Top Gun is long Comcast (CMCSA) and has no position in Best Buy (BBY) or Chipotle (CMG).