Best Buy, the No. 1 US electronics retailer, reported an unexpected decline in holiday-quarter same-store sales on Wednesday, hurt by weak demand for tablets, gaming consoles, wearable devices and mobile phones.
Shares of the retailer, which also forecast a 1-2 percent decline in current-quarter same-store sales, slumped more than 9 percent in premarket trading.
Best Buy’s sales at stores open for more than a year fell 0.7 percent in the fourth quarter, widely missing analysts’ average estimate of an increase of 0.5 percent, according to research firm Consensus Metrix.
Brick-and-mortar retailers are currently under pressure from slow U.S. economic growth and fierce competition from online rivals such as Amazon.
Total sales at US electronics and appliance stores were down about 4 percent in December, according to data from the U.S. Department of Commerce.
Best Buy’s net revenue fell 1 percent to $13.48 billion in the three months ended Jan. 28, missing the average analyst estimate of $13.62 billion, according to Thomson Reuters I/B/E/S.
However, cost cutting efforts boosted the company’s net income, which rose to $607 million, or $1.91 per share, from $479 million, or $1.40 per share.
Excluding items, Best Buy earned $1.95 per share, beating the average estimate of $1.67.
Best Buy also increased its quarterly dividend to 34 cents per share from 28 cents and announced a share repurchase plan that accelerates from $1 billion over two years to $3 billion over two years.
With fewer planned cost cuts and innovative new electronics on the horizon, analysts have voiced concerns that 2018 could be a tough year for Best Buy, which has been launching buybacks to drive earnings per share growth.
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