Is Best Buy Co., Inc. (BBY) Worth Buying?

Investors are loving Best Buy Co., Inc. (NYSE:BBY) these days, but can the same be said about its shoppers? Best Buy stock may be one of this year’s biggest winners, but the news isn’t likely to be as upbeat when the struggling consumer-electronics chain reports on Tuesday.

Best Buy Co., Inc. (NYSE:BBY) stock hit a new high this week, and the shares have more than doubled this year, but don’t be fooled by a pretty stock chart. Best Buy still has some pretty big problems.

Analysts see Best Buy Co., Inc. (NYSE:BBY) earning $0.25 a share during the fiscal first quarter ending in April, roughly a third of the $0.72 a share it posted a year earlier. Revenue is expected to decline by 8%. This certainly doesn’t seem like a company on the upswing.

Bulls will point to positive comps during its most recent holiday quarter, but Best Buy Co., Inc. (NYSE:BBY) had to sacrifice plenty to arrive at the meager 0.9% same-store-sales growth. Gross margins contracted slightly, and marketing costs spiked as promotional activity picked up to woo traffic.

Oh, and let’s not make the false assumption that the typical Best Buy Co., Inc. (NYSE:BBY) store rang up more sales this holiday season than it did last year. There’s a little more to that 0.9% increase than meets the eye, because Best Buy includes its 11% spike in online orders in calculating comps. It’s a sneaky yet legal trick that way too many retailers are doing these days, and the impact was heightened here because Best Buy shuttered 49 of its superstores early last year. In other words, we had fewer stores for these BestBuy.com sales to be misleadingly divided into. Back out the Internet sales contribution, and comps would have been slightly negative.

There’s also that 11% increase in online revenue itself to frame correctly. Amazon.com, Inc. (NASDAQ:AMZN) — Best Buy’s showrooming nemesis — saw its net sales soar 22% during its holiday quarter. Best Buy Co., Inc. (NYSE:BBY) actually continues to lose ground to the leading online retailer by growing its BestBuy.com sales at half of Amazon.com, Inc. (NASDAQ:AMZN)’s clip.