Best Buy (BBY) Stock Declines Today After Poor Sales Outloook
NEW YORK (TheStreet) -- Shares of Best Buy (BBY) - Get Report are down 7.29% to $37 in pre-market trade after it was reported that the largest electronics retail chain warned that price pressure and sluggish demand will lead to a sales slump in the first half of the year, Bloomberg reports.
Deflationary pricing, weak demand for some categories of electronics and fewer people buying extended warranties all threaten to weigh on the company's results, the company said in a statement today. Sales in the first half will range from being little changed to dropping in the low single digits, Best Buy said.
That outlook follows a 2.6% gain in U.S. same-store sales for the holiday season, which the company credited to customers buying big-screen TVs and phones. Its multichannel strategy, which lets customers order items online and pick them up in the store, also helped bolster sales, Bloomberg noted. Still, the allure of new products may not extend into the coming year, the company said.
The mobile-phone and home-theater gains "were partially driven by the excitement around high-profile products and will not likely continue at holiday levels," CFO Sharon McCollam said in the statement.
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