Best Buy Co., Inc. (NYSE: BBY) Tuesday reported fourth-quarter sales that fall short of analysts’ estimates, due to weaker consumer electronics sales during the holiday quarter.
The company said revenue was $13.48 billion in the quarter ended January. Analysts polled by Thomson Reuters had projected revenue to be $13.62 billion. Excluding Certain items, Net income was $1.95 per share, beating analyst estimates of $1.67 per share.
“In the fourth quarter, we delivered Enterprise revenue of $13.5 billion, near the midpoint of our guidance range, improved our operating income rate by 80 basis points and delivered significantly higher-than-expected EPS growth. On a full year basis, we delivered the topline performance we outlined at the beginning of the year – with materially better earnings than originally expected,” said Hubert Joly, Best Buy chairman and CEO.
The weaker-than-expected sales due to a soft performance on consumer electronics. The company said price deflation and a lack of major product introductions weight on the sales. In addition, demand for smartphones and tablets declines. As a result, same-store sales fell 0.7 percent in the quarter. Best buy shares fell as much as 4.55 percent to $42.07 in the early trading.
Moody's analyst Charlie O'Shea said: "Best Buy's ability to expand margins in [the fourth quarter] in the face of what we characterized as one of the most promotional holiday seasons we have seen in the last 15 years, especially in Best Buy's key product categories, is impressive," CNBC reported.