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Best Buy revenue dips and trend likely to continue this year

Sluggish electronics sales will hinder Best Buy revenue in first half of the year.

February 26, 2016

A dip in consumer demand for electronics is hurting Best Buy and a prime reason why revenue decreased in its Q4 and will likely continue to decrease in the first six months of this year.

The retailer's U.S. revenue dropped 1.5 percent, hitting $12.5 billion, according to a USA Today report, and the dip reflects the overall industry consumer sales decrease, according to CEO Hubert Joly. Not only are sales slowing there is a product price decrease impact as well.

"The softness we saw in the NPD-tracked categories and mobile phones will continue," said Best Buy Chief Financial Officer Sharon McCollam in a statement, according to a Bloomberg report.

Best Buy is predicting sales will dip 1 to 2 percent in the current quarter, with revenue hitting between $8.25 billion and $8.35 billion. Industry analysts were hoping for $8.4 billion, according to Bloomberg.

"We are expecting revenue declines in the first half followed by growth in the back half," McCollam said. "We are targeting flat Domestic revenue for the full year due to continued growth in appliances, connected home and home theater in particular, but recognize that it will be challenging without a strong mobile cycle and improvements in the NPD-reported categories overall."

According to Bloomberg, Best Buy's ecommerce for the quarter represents 15.6 percent of U.S. revenue, a small bump from 14 percent in the same period last year.