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Best Buy Shares Plunge As Holiday Comps Disappoint

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Shares of Best Buy Co Inc (NYSE: BBY) plunged nearly 10 percent on Thursday and hit a new 52-week low of $25.61 after the company reported disappointing holiday sales metrics sales metrics.

Best Buy's domestic revenue fell 0.8 percent from a year ago to $10.050 billion during the nine-week period ending January 2. The company added that its same-store sales also fell 1.4 percent during the holiday season.

Best Buy noted that the decline in domestic sales was primarily driven by a softer-than-expected demand in the mobile phone category. Excluding the mobile phone category, the company's domestic revenue would have grown year-over-year given a strong performance in health & wearable, home theater and appliances.

Best Buy said its domestic online revenue rose 12.6 percent on a comparable basis to $1.7 billion primarily due to a higher conversion rate. In addition, online revenue as a percentage of total domestic sales rose to 16.7 percent from 14.7 percent a year ago.

Based on Best Buy's holiday sales performance, the company updated its fourth quarter outlook and expects: 1) a revenue decline of near 1.5 percent versus prior expectations, and 2) a non-GAAP operating income rate decline of 10 to 15 basis points versus prior expectations of a rate decline of 20 to 35 basis points.

Best Buy also disclosed that its international outlook remains unchanged and the company continues to expect an international revenue decline of around 30 percent and an international non-GAAP operating income rate of 2.0 to 3.0 percent.

Posted-In: best buy Best Buy Holiday Sales Health & WellnessNews Guidance Retail Sales Intraday Update Movers

 

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