Best Buy comparable sales down; outlook for holiday season weak
By Nandita Bose and Ramkumar Iyer
(Reuters) - Retail chain Best Buy Co Inc (BBY.N: Quote) on Thursday forecast a revenue decline for the crucial holiday quarter and reported lower-than-expected quarterly comparable sales, citing slower consumer demand for mobile phones and tablets.
Shares of the No. 1 U.S. consumer electronics chain fell nearly 5 percent.
Best Buy's forecast fed worries among analysts and investors about U.S. consumer holiday spending, with shoppers holding back in one of the strongest gift-giving categories due to a lack of popular electronic products and sluggish wage growth.
"Industry declines that we saw in the third quarter, both sequentially and year-over-year, may continue throughout this year's fourth quarter," Chief Executive Officer Hubert Joly said on a conference call.
Target Corp (TGT.N: Quote) on Wednesday said a double-digit decline in quarterly electronics sales curbed its online sales growth.
At Best Buy, declines in tablets, mobile phones and digital imaging offset growth in major appliances, wearables and large-screen televisions in the third quarter ended on Oct. 31.
The retailer forecast a low single-digit percentage decline in revenue and a drop in operating income for the fourth quarter. Also, new investments in Geek Squad services would hurt gross profit.
Joly said the benefits from investing in services had started trickling in and would become visible over several quarters. Continued...