Best Buy Co Inc , the No. 1 U.S. electronics retailer, reported an unexpected decline in holiday-quarter same-store sales on Wednesday, hurt by weak demand for tablets, gaming consoles, wearable devices and mobile phones.
Shares of the retailer, which also forecast a 1-2 percent decline in current-quarter same-store sales, slumped more than 9 percent in premarket trading.
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Best Buy's sales at stores open for more than a year fell 0.7 percent in the fourth quarter, widely missing analysts' average estimate of an increase of 0.5 percent, according to research firm Consensus Metrix.
Brick-and-mortar retailers are currently under pressure from slow U.S. economic growth and fierce competition from online rivals such as Amazon.com Inc .
Total sales at U.S. electronics & appliance stores were down about 4 percent in December, according to data from the U.S. Department of Commerce. (http://bit.ly/Y4FaTF)
Best Buy's net revenue fell 1 percent to $13.48 billion in the three months ended Jan. 28, missing the average analyst estimate of $13.62 billion, according to Thomson Reuters I/B/E/S.
However, cost cutting efforts boosted the company's net income, which rose to $607 million, or $1.91 per share, from $479 million, or $1.40 per share.
Excluding items, Best Buy earned $1.95 per share, beating the average estimate of $1.67.
Best Buy also increased its quarterly dividend to 34 cents per share from 28 cents and announced a share repurchase plan that accelerates from $1 billion over two years to $3 billion over two years.
With fewer planned cost cuts and innovative new electronics on the horizon, analysts have voiced concerns that 2018 could be a tough year for Best Buy, which has been launching buybacks to drive earnings per share growth.
(Reporting by Richa Naidu in Bengaluru; Editing by Savio D'Souza)