Best Buy (BBY) forecast a decline in sales for the crucial holiday quarter and reported weaker-than-expected comparable sales for the third quarter due to weak demand for mobile devices, TVs, computers and cameras.
Shares of the No.1 U.S. consumer electronics chain operator were down about 5% as of Thursday morning.
Best Buy said its same-store sales rose 0.5% in the third quarter, excluding the impact of installment billing plans. Analysts on average had expected a rise of 0.8%, according to research firm Consensus Metrix.
The company’s revenue from services such as repairs and extended warranties also fell.
Best Buy said it expected a low single-digit percentage decline in its fourth-quarter sales.
The company also said its gross margin were under pressure due to higher investments in its online business and repair and warranty services division.
While a decline in Sears Holdings’ store count and the bankruptcy of competitor RadioShack have benefited Best Buy, online retail giant Amazon still poses the biggest threat as more people increasingly opt to shop online.
The net income attributable to Best Buy‘s shareholders rose nearly 17% to $125 million, or 36 cents per share, in the quarter ended Oct. 31.
Excluding items, the company earned 41 cents per share from continuing operations.
Revenue fell 2.3% to $8.82 billion.
Analysts had expected a profit of 35 cents per share and revenue of $8.83 billion, according to Thomson Reuters I/B/E/S.
Up to Wednesday’s close, the stock had fallen about 19 percent this year.
