NEW YORK (TheStreet) -- Shares of Best Buy (BBY) - Get Report are climbing Tuesday afternoon, nearly two weeks after the company announced that its holiday season sales were lighter than expected. Best Buy shares are down 0.73% to $27.07 on heavy volume today. The disappointing period caused the electronics retailer to reduce its sales outlook for the fourth quarter.
The company said that same-store sales from the nine-week period ending Jan. 2 fell 1.2% vs. growth of 3.4% in the year-ago period. Online revenue rose 12.6% vs. a 13.4% increase from last year's holiday season. Computing and mobile phones sales fell 7.2%, while appliance and consumer electronics sales rose 13.4% and 4.3% respectively.
Overall, the company reported that domestic revenue fell 0.8% in the period, but noted that that performance was better than the overall electronic retail industry's performance. Revenue for the full quarter is expected to fall 4% with a $0.01 to $0.03 decline in adjusted earnings per share.
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This decline resulted in TheStreet Ratings' decision today to lower the company's rating to "hold" from "buy," while also lowering its letter grade to C+ from B-.
TheStreet Ratings identified several strengths in the company including its increase in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, TheStreet also found weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.
TheStreet Ratings uses an algorithmic model to determine a rating for risk-adjusted total return prospect over 12 months.