This story has been updated from 10:32 am EST to include reports of management layoffs, stock price update.
NEW YORK (TheStreet) - On Thursday morning, investors will hear just how bad competition over the holiday season dented Best Buy (BBY) when it reports fourth-quarter earnings.
The Richfield, Minn.-based electronics chain already said in January comparable store sales for the first nine weeks of the quarter dropped 0.8%, compared to a consensus expectation of a 2% rise.
Comps at domestic stores specifically dropped 0.9%, reflecting a highly promotional and competitive environment from the likes of Amazon (AMZN) and Wal-Mart (WMT).
Best Buy said that revenue as of Jan. 4 had fallen 2.5% to $11.45 billion, compared to the prior year's quarter and that its non-GAAP operating margin would drop 175-185 basis points over last year.
As a result, Best Buy plans to rejigger strategic plans for 2014 to include lowering its cost structure "more quickly and more deeply;" grow its online channel at an "accelerated pace;" and reinvigorate and expand its Geek Squad services business, among other things, the company said at the time.
Wall Street will be looking for more clarity on those cost-cutting plans and just how it plans to take market share from big competitors.
According to a report by the New York Post, Best Buy plans to cut up to 2,000 mid-level managers this year at its more than 1,000 stores across the country. Best Buy has already notified roughly 500 "field managers" of job cuts last week, the Post claims. The firings are not expected to affect customer-facing employees.
A Best Buy spokesman declined to comment to TheStreet.
"To us, the key to BBY's success is its ability to cut costs in order to fund its lower gross margin to stay competitive with Amazon," Deutsche Bank analyst Mike Baker wrote in a Feb. 18 note to clients. "This way, they should maintain or even increase market share, while driving higher earnings power, with SG&A reductions offsetting margin declines."
Following the sales report, analysts dropped their earnings estimates from an average profit of $1.62 a share at the time, to $1.01 a share, on average, currently, according to Thomson Reuters. Revenue is expected to fall 12% to $14.66 billion.
The consensus also expects comparable sales for the quarter to fall 1% for the quarter, following Best Buy's dismal holiday sales report.
Here's what Wall Street analysts are saying leading up to earnings.