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Hi Fellow Fools,

This was bittersweet: BBY was one of my first Stock Advisor investments. I bought in August of 2007 and sold a little over three years later at break-even ~$45 p/s. It has since fallen to a third of that value.

Best Buy is still my favorite electronics retailer, but I fear for what the future holds for them. AMZN continues to take share of electronics (as well as other categories) from BBY, as well as WMT and TGT. I buy much from AMZN and am an investor, but it is sad to see the path that BBY is currently on...

It seems that Best Buy (NYSE: BBY) investors finally have something to celebrate. When Best Buy reported earnings on Friday, the stock price jumped over 16%. So they must have had a really GREAT quarter, right? Actually, it just stunk less.

Dig a little deeper into the numbers and what you see is no reason to celebrate. Revenue fell by 0.4% from a year earlier during the all-important holiday shopping season. The crucial same store sales metric, which factors out stores open less than a year, actually dropped 1.4% in the recent quarter. US same store sales were flat and international same store sales tanked 6.4%. However, the drop was less than analysts and investors were anticipating. They also saw online sales increase by 10%. So let’s break out the bubbly, right?

Unfortunately, Best Buy is sandwiched firmly between a rock and a hard place and the future presents challenges. However, in order to understand the threat to Best Buy and other big-box retailers, we must first look at a broader societal retail trend and its implications.

Let me know what you think.

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