Best Buy sales decline takes toll on stock

Best Buy's fourth-quarter sales slipped as gamers spent less than expected and certain products were not readily available, dealing a blow to the retailer's stock despite higher-than-anticipated profit.

Investors drove the electronics retailer's shares down more than 9% in pre-market trading before the shares regained some ground. The stock was down 4.1% to $42.30 at 8:15 a.m. after the chain reported disappointing sales at stores open at least a year.

The disappointing sales report comes as Wall Street is watching big-box retailers closely for signs of hardship. Target's stock plunged 12.2% Tuesday after an uninspiring earnings report, which came a week after Walmart recorded solid results.

Best Buy's same-store sales declined 0.7% for the period ended Jan. 28, which included the critical holiday shopping season. That missed S&P Global Market Intelligence's expectations of a 0.7% increase.

But net earnings rose 26.7% to $607 million, beating expectations of $524 million. On a per-share basis, earnings were $1.95, outpacing expectations of $1.67.

Slumping sales of gaming products, tablet computers, health and wearable products and mobile phones offset encouraging results for connected home devices, headphones, computing devices and home theater.

Best Buy CEO Hubert Joly said in a statement that "unprecedented product availability constraints across multiple vendors and categories" hindered sales.

Revenue fell 1% to $13.5 billion for the quarter, compared to a year earlier, trailing S&P Global Market expectations of $13.6 billion.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

(© 2017 USA TODAY)


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