Best Buy's Stock Drops After Holiday Sales Disappoint

Best Buy Co.'s stock slumped 5.3% in premarket trade Thursday, after the consumer electronics retailer reported holiday-period sales that were below expectations, as weakness in mobile phone sales offset strength in home theater, health & wearables and appliances. For the nine week ended Jan. 2, U.S. sales fell to $10.05 billion from $10.13 billion in the same period a year ago. International sales declined 26% to $911 million. Domestic same-store sales during the period fell 1.2%, as mobile phones sales dropped 7.2%. U.S. online sales increased 13%. "From a financial perspective, despite a slightly softer-than-expected topline, we are improving our fourth quarter operating income rate outlook as a result of our continuing conviction to a disciplined promotional strategy and strong expense management," said Chief Executive Hubert Joly. The stock has tumbled 16% over the past three months through Wednesday, while the S&P 500 has lost 5.2%.