Best Buy Co. Inc. (BBY - Get Report) shares fluttered downward Thursday morning, Nov. 16, even though it met Wall Street expectations in third-quarter earnings, posting earnings of 78 cents per share — exactly what analysts projected, according to FactSet.
Sales revenue fell short of the Street's projection of $9.36 billion. The electronics retailer instead reported $9.32 billion, citing the delayed iPhone 8 and iPhone X launch and impact from this year's hurricanes as why sales were down. Its forecast for earnings for the fourth quarter is now also lower than analysts' expectation of $2.03 per share. Instead, it anticipates $1.89 to $1.99 per share.
All the while, comp sales increased 4.4% and online sales grew even faster at 22.3%.
"First, despite our moderate expectations for mobile phone launches in the quarter, revenue in the mobile category was materially lower than expected. This was due to the fact that a major new phone did not launch until November, which is in our Q4," CEO Joly Hubert said in a statement.
The delayed launch resulted in "significant softness" in existing phone sales because customers were putting off making the purchase, the company said. The impact reached more than $100 million. The second factor was the hurricanes that struck south Texas, Florida, Puerto Rico and Mexico in early September.
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Best Buy execs did not reveal how the new iPhone, made by Apple Inc. (AAPL - Get Report) , release affected sales, but Joly said during the earnings call that the company has improved the pre-order process ahead of the release.
Best Buy raised its full fiscal year outlook. It now expects revenue to reach between $41 billion and $41.3 billion, or growth of 4% to 4.8%. To facilitate its new smart home offerings in collaboration with Alphabet Inc.'s (GOOGL - Get Report) Google and Amazon.com Inc. (AMZN - Get Report) , the company announced that it hired 1,500 new store employees.
Early next year, it will also expand its in-home advisory program, available in all major U.S. markets and offer customers free consultations. Best Buy's strongest forte has always been its customer service — something that Amazon customers cannot receive.
For the holiday season, Best Buy will offer free shipping with no minimums and same-day shipping in 40 cities.
So far this year, Best Buy's stock saw a 30% rise in value. But its Q3 mixed results may signal an end to a two-year growth spurt.
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