News

Jolly holiday season not so jolly for Best Buy

Electronics retailer faces biggest stock dip in a year due to weak holiday sales and what analysts view as a slump in mobile phones, electronics segment.

January 15, 2016

Santa didn't deliver what Best Buy was hoping for this holiday season as its latest financial results reveal the electronics player is being hurt by a drop in consumer interest in electronics and mobile phones, according to news reports.

In fact, Best Buy's stock dip, a drop of 6 percent, is its worse in a year with same-store sales decreasing 1.2 percent in both November and December according to the retailer. A year prior Best Buy was enjoying a 2.5-percent uptick, stated Bloomberg.

Yet compared to competitors Best Buy's performance wasn't awful, according to CEO Hubert Joly, and Best Buy did see growth in wearables, home appliances and theater room electronics.

"We grew the business, excluding mobile phones, in a backdrop with a retail industry that was tough," Joly stated in an earnings conference call Thursday, reported Bloomberg. The holiday sales dip is prompting Best Buy to reduce earnings forecasts, according to one report.

AnalystPaula Rosenblum, managing partner at RSR Research, said Best Buy's sales are being impacted by changing consumer shopping behavior.

"Millennials aren't interested in wandering around from brand to brand — it's easier to buy online," she said, according to CNN.

Revenue fell 3.6 percent to $10.96 billion, reported Reuters.