Updated from 9:23 am EST with a stock recommendation from Jim Cramer as well as Best Buy's most recent stock price.
NEW YORK (TheStreet) -- This year's holiday season, characterized as one of the most intense regarding promotional activity aimed at getting consumers in the door, didn't work out so well for Best Buy (BBY - Get Report).
Best Buy's stock plunged more than 30% after the electronics retailer disclosed comparable store sales for the fourth quarter so far declined 0.8%. Analysts were expecting a rise of 2%.
For the nine weeks ending Jan. 4, Best Buy's revenue totaled $11.45 billion, down 2.5% from the same period last year. Domestic revenue declined 1.5% to $9.75 billion over the prior year.
Comparable store sales declined 0.8% during the quarter. Within its domestic stores, comps dropped 0.9%, reflecting a highly promotional and competitive environment, the company said.
"The message behind today's announcement is very clear to me," Best Buy Founder and Chairman Emeritus Richard Schulze said in a separate statement. "Best Buy is on this journey and in this business to win, acquire, and retain new and existing customers. I have complete faith in the long-term strategy and I am confident that management is taking the steps required to win and position the company for a successful future."
Shares were most recently dropping 27.6% to $27.20 on massive volume of more than 59 million shares traded on Thursday.
However, TheStreet's Jim Cramer says if you see a stock down as much as Best Buy, wait for the second day of trading before making a decision to buy.
A bright spot was Best Buy's online sales, rose 23.5% to $1.32 billion over last year.
However, the company said that merchandise growth in computing, appliances and gaming segments were "more than offset by declines in other categories, including digital imaging, movies and MP3 players."
Holiday revenue was hurt by a number of factors, including "the aggressive promotional activity in the retail industry during the holiday period, which we believe did not result in higher industry demand and had a deflationary impact on our revenue, "as well as supply constraints for key products. Joly also blamed "significant store traffic declines" during the week before Christmas as well as "a disappointing mobile phone market," according to Hubert Joly, Best Buy's president and CEO.
"When we entered the holiday season, we said that price competitiveness was table stakes and an intensely promotional holiday season is what unfolded," Joly said. "In both channels, the promotional intensity that began with Black Friday continued throughout the period, which led us and our competitors to answer one question - do we make the incremental investment necessary to be price competitive and defend our market share? For us, there was only one answer. To advance our Renew Blue transformation, it was imperative that we live up to our customer promises - and one of these promises is to offer our customers competitive prices. This investment in pricing did come with a higher-than-expected cost."
As a result Best Buy is lowering fourth-quarter non-GAAP operating margin (as a percentage of revenue) by 175 to 185 basis points, compared to last year's rate of 5.7% in the equivalent period. Best Buy reported an operating loss of $145 million in the year-earlier quarter.
Analysts, according to Thomson Reuters, expect the company to report earnings of $1.62 a share for the January-ending quarter.
Joly said key priorities going into the company's fiscal 2015 will be to "more quickly and more deeply" lower its cost structure; grow the online channel at an "accelerated pace;" continue to improve and innovate the multi-channel customer experience; enhance its marketing, particularly relating to personalization, targeting of customer segments and buying occasions; and reinvigorate and expand its Geek Squad services business.
-- Written by Laurie Kulikowski in New York.