Going into this week’s earnings report, there was not much optimism about Best Buy’s (NYSE:BBY) prospects.  Since July, the stock has tumbled to below $23 from $32.  For investors, it has been Best Short.

The lack of optimism was seemingly well deserved — it was hard to find anything encouraging in the company’s quarterly report released earlier Tuesday, which had the stock down more than 8%.  Profit fell by 30% to $177 million, and revenue was up a mere 0.1% to $11.4 billion. Same-store sales fell by 2.8%, and the company has seen such declines for the five past quarters.

True, management did boost its earnings per share forecast, but this was mainly due to expected stock buybacks.  It seems this is the only strategy that is getting any traction.

Let’s face it: The slowing economy is taking a toll.  How many flat-screen televisions can be sold in such an environment?  And Best Buy will have to contend with fierce competition from rivals like Wal-Mart (NYSE:WMT), which have the scale to provide dirt-cheap prices.

At the same time, Amazon.com (Nasdaq:AMZN

) continues to eat into Best Buy’s business.  Keep in mind that the online retailer’s market cap is $97 billion, which makes it much easier to compete.  Best Buy’s its market value is only $8.6 billion.

Best Buy did generate strong domestic mobile sales, with a 9% rise in same-store sales.  No doubt, Best Buy is getting traction with Apple’s (Nasdaq:AAPL) iPad and other devices.  Yet this is not likely to do much to compensate for the weakness in other product categories.

Even with a low valuation – at 7 times earnings – Best Buy shares still don’t look attractive, and unfortunately, there are few catalysts to move the stock.  If anything, it’s a good bet that the price will go even lower for the rest of the year as the competition continues to exact damage – putting further pressure on the top line and margins.

Tom Taulli is the author of “All About Short Selling” and “All About Commodities.”  You can also find him at Twitter account @ttaulli.  He does not own a position in any of the stocks named here.