Lumber Liquidated CEO; Best Buy’s Earnings Electrifying; Home Sweet Lack of Homes

Gee I wonder why…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

If you find yourself up for a challenging career change, look no further than embattled Lumber Liquidators, who now has a job opening…for a new CEO. After months of scrutiny and criticism following a scathing “60 Minutes” report about its dangerously high-levels of formaldehyde-laced flooring, Lumber Liquidators CEO Robert Lynch threw in his corporate towel. He officially resigned from the company and stepped down from the board of directors. Shares of the company took a 16% hit before the market even opened following the news of Lynch’s resignation, adding to the slide that Lumber Liquidators has been taking for months now. In fact, its stock is down more than 60% for the year. However, in Lumber Liquidator’s defense, 97% of its products found in its flooring already installed in customers’ homes was found to be within protective guidelines. As for that other 3%…well, I suppose that explains why the company is under federal investigation.

Best ever?

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Best Buy managed to score some impressive earnings with a big fiscal shout out to big-screen tv’s and “iconic” smart-phones. In case it wasn’t obvious, CEO Hubert Joly deems the iPhone 6 and Galaxy S6 “iconic.” Other money-makers for the company were home appliances, which makes perfect sense since the housing market is easing up  (sort of, see below) making it easier for people to actually afford their homes, which they then need to fill with super convenient items like ovens and refrigerators. Just try living without them. Shares of the stock gleefully went up 7% before the market opened as the company announced it pulled in a profit of $129 million with 36 cents per share added, even though Wall Street only expected the electronics giant to post a 29 cent per share gain. A year ago the company pulled in a $461 million with $1.31 per share added, except that was all because of a tax change, so the year-over-year comparison is almost a moot point. The company saw revenues of $8.56 billion which was actually a slight drop from last year. But again, no one is too concerned because a.) analysts predicted revenues of only $8.46 billion b.) Best Buy is saying au revoir to 66 stores in Canada (yes, just like Target) so a loss of revenue was expected.  Oh, Canada. c.) the strong dollar has been messing with very company’s earnings and why should Best Buy be any different.

Is it? Or isn’t it?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Once again, leave it to the housing market to toy with our fiscal emotions.  April proved to be nothing short of a bummer as sales of existing homes dropped, according to the National Association of Realtors. The culprit, it seems, is the fact that there are not as many listing, and the prices for homes are higher. Supply and demand, I tell you. Arghh!!! Just a little over 5 million homes were sold in April representing a 3% drop. And nobody likes a drop. Part of the problem is that people aren’t listing their homes. Maybe they just like the ones in which they are currently living. Maybe they don’t see listings that they like. In any case, the median price for a home these days is hovering around $219,000, almost 9% more than a year ago.  Of course building more homes is a logical way to fix this housing inventory issue.  And builders are doing just that, as evidenced by the rise in new building applications recently reported. But the problem is that building a new home can take about a year and who wants to wait that long to see some housing recovery?

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Best Buy Earnings Beat; Wal-Mart Gets Smart (Sort of); Home Sweet Pre-Existing Home;

Surprise surprise…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Score one for Best Buy which just posted its third quarter earnings much to the surprise and delight of everyone – well, except for Amazon. But we’ll get to that soon. The electronics retailer pulled in some nice earnings all thanks to higher-definition televisions – a perennial fave. Store sales were up over 2% which means people aren’t necessarily flocking to Amazon after browsing in Best Buy stores. Earnings for the retailer came in at $.32 per share and $107 million. Estimates were pegged at $.25 per share. A year ago Best Buy only raked in $54 million and $.16 per share. Revenue came in at $9.38 billion. Not much of a change from last year, but still, no loss. Naturally, all the good fuss caused shares of the stock to go up as well. How convenient. But to be fair, it was all part of Best Buy CEO Hubert Joly’s master plan to turn around the company. The surprisingly good numbers came at the expense of lots of cost-cutting, including jobs. For his second act, Joly has big plans to partner up with other companies like  “it” company, GoPro.

The jig is up…

Image courtesy of Arvind Balaraman/FreeDigitalPhotos.net

Image courtesy of Arvind Balaraman/FreeDigitalPhotos.net

In the market for a $90 Playstation4? Good luck on that one. Wal-Mart has (finally?) caught up to some crafty internet scammers who industriously, albeit feloniously, created fake ads to present to Wal-Mart employees in order to capitalize on its price-match guarantee. But after updating, clarifying and re-vamping its policy, scammers are going to have a much harder time securing those “deals” especially for all those Xboxes and PS4s. Wal-Mart (very) recently posted this on its website: “We’ve updated our policy to clarify that we will match prices from Wal-Mart.com and 30 major online retailers, but we won’t honor prices from marketplace vendors, third-party sellers, auction sites, or sites requiring memberships.” And at the end of the day, the Store Manager gets the final word. Happy Holidays!

House party…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

More good news about the economy. I know you can hardly stand the excitement as the National Association of Realtors announced that existing home sales rose 1.5% in October. While that may seem like a relatively small number its actually huge on so many levels. For one, the 1.5% rise is the fastest pace in over a year. It also means that 5.26 million homes were sold. A big shout out goes to low interest rates. It also  wouldn’t be right if we didn’t mention the merits of a strengthening job market. Because, hey, if you want to buy a house, a job is good thing to have to help pay the mortgage, no? Foreclosures and short sales aka “distressed sales” even dropped to 9% of the total versus the 14% of the total a year ago. Good news for the economy. Not so much for you, that is, if you were in the market for a discounted home that went for 15% below market value. It’s a give and take, my friend. The median price for existing homes is $208,300 which is actually a 5.5% increase over last year’s median price at this time. And wouldn’t you know it, those supremely intelligent analysts predicted a decline instead. Ha. Thinking of something more upscale? Homes that sold for above the magical million dollar mark jumped 16% from a year ago.