Stocks: Best Buy, Dick's, Urban Outfitters, Abercrombie & Fitch all take hits after earnings

Yahoo Finance's Emily McCormick details how a slew of retail names are trading lower on Tuesday after reporting Q3 earnings.

Video Transcript

- Oil has been a big story today. But it's not the only story that we're tracking. Retail sales and earnings on the front line, with Gap set to report after the bell. Best Buy and Dick's reporting earlier this morning, all ahead of a key date for retailers, Black Friday. Here with insight on how retailers are faring is Yahoo Finance's Emily McCormick.

EMILY MCCORMICK: Well, Karina, a number of major retail stocks are coming under pressure today. Many of these companies latest quarterly results actually did top expectations on the top and bottom lines. But many of these companies did highlight ongoing supply chain issues and other concerns in their quarterly reports and in their earnings calls. So that is the cause of a lot of this pressure here today.

Now, I want to start off on Best Buy, since of course that is one of the companies that we always watch closely heading into Black Friday sales and the broader holiday season. The focus in Best Buy's report was really on slightly weaker than expected margins. Now, you can see that outsized decline in the stock this afternoon, even as gross margins were just a hair short of estimates at 23.5% versus the 23.6% estimate.

Now, one of the factors that had weighed on margins during the quarter was actually heightened levels of shrinkage or theft. That's something that Best Buy CEO, Corie Barry, had talked about during the company's earnings call.

And management also highlighted that there had been some pull forward in sales in October rather than during the typical holiday shopping season in anticipation of some of these shipping delays and other supply chain issues. So that did seem to be something that spooked Wall Street as well after this report.

Then turning to Dick's Sporting Goods, of course another major retailer reporting before the bell today. A little bit of profit taking that's actually happening here, since as you can see, the company did top expectations as well in terms of those main quarterly results.

Net sales grew 14% to reach nearly $2.8 billion. And that was ahead of estimates. And Dick's Sporting Goods also raised its full year comparable sales forecast. But again, we are seeing that stock lower after more than doubling so far for the year to date. So a bit of profit taking on that front.

And then finally, I want to quickly highlight results from two apparel retailers that we got out earlier today as well. That's from Abercrombie & Fitch as well as Urban Outfitters. Now, both of these stocks are getting slammed this afternoon. And in fact, Abercrombie shares were down by the most since March 2020 intraday today. And the company did say that its gross profit rate declined by 30 basis points year on year, in part due to elevated supply chain costs.

And then finally, turning to Urban Outfitters, one of the things that company had shown was that both the main flagship, Urban Outfitters brand sales, and Anthropology brands, missed revenue estimates for the latest quarter. So showing a little bit of slowing growth momentum for those two key brands for that company as well.

But again, guys, all of these stocks are moving lower in intraday trading. We did have a case of elevated expectations heading into these results because of what we'd seen from Walmart, Target, and Home Depot over the past couple of weeks. And these latest results just didn't quite clear that bar, guys.

- What's interesting too, Emily, is that we've seen foot traffic at places like Best Buy. We just had the guest on Ethan from Placer.ai on at the beginning talking about foot traffic up over 2019. At Best Buy, it's up over 6% over the past couple of--