A Best Buy store in Huntington Beach, CA
Photograph by Diana Haronis — Moment Editorial/Getty Images

And hhgregg going under won't be a help.

By Phil Wahba
March 1, 2017

Best Buy bby shares fell in premarket trading on Wednesday morning as investments for the next phase of its multi-year turnaround, coupled with an expectation for weaker sales, led to a disappointing first-quarter profit forecast.

Shares fell as much as 10% to $39.70 in premarket trading before paring much of that decline.

During the key holiday season, Best Buy more than held its own against rivals in a heavily promotional environment, but nonetheless saw U.S. comparable sales fall 0.9%, a disappointing number partly mitigated by a strong 17.5% increase in online stores. Target for one has said its electronics category was a weak performer in what was a poor holiday season for that retailer.

“We continued to gain share across the majority of categories and we believe, in aggregate,” Best Buy CEO Hubert Joly said in a statement. “At the same time, our revenue was hindered by unprecedented product availability constraints across multiple vendors and categories, only some of which were anticipated.” Company wide, comparable sales were down 0.7%.

The company had said in November it expected to take a $200 million hit from Samsung Galaxy Note 7 smartphone recalls and the absence of those products during the holiday quarter. Some of Best Buy’s fourth quarter pain came from weak demand in gaming and the stagnating demand for once-hot items like tablets and high definition TVs.

Joly and his team have earned praise for transforming Best Buy in recent years, even as the likes of Amazon.com amzn , Target tgt and Walmart wmt have gone aggressively for the electronics market by slashing costs. The company has revamped stores with areas for vendors like Apple apple and growing categories like home theatre. Now, Best Buy is entering a new phase of the turnaround, called ‘Building the New Blue’, to focus more on e-commerce, customer service and speed up overseas growth, initiatives that will take investments.

For the current quarter, Best Buy expects adjusted per-share earnings in the range of 35 cents to 40 cents, below the consensus Wall Street estimate of 49 cents. And U.S. domestic comparable sales are expected to fall 1.5% to 2.5%, hurt in part by a delay in tax refunds being distributed to consumers, executives said on a call.

Still, the company did hand out candies to investors: it raised its quarterly dividend 21% to 34 cents a share and announced an accelerated share repurchase plan that goes from $1 billion over two years to $3 billion over two years.

During the fourth quarter, Best Buy’s revenue fell 1% to $13.48 billion, a hair below analysts’ estimate of $13.62 billion, according to Thomson Reuters I/B/E/S. But its adjusted profit of $1.95 per share handily beat Wall Street projections for $1.67.

Asked by an analyst whether the possibility of smaller rival hhgregg hgg filing for Chapter 11 bankruptcy, as reported by several news outlets, could be a boon, Joly said without naming hhgregg that its appliance sales were $1 billion and that would be distributed between a number of rivals, so a liquidation would be “nothing transformative” for Best Buy.

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