Best Buy Co.’s same-store sales fell by more than expected in the third quarter after what the retailer called “uneven consumer demand.” That weakness led the chain to cuts its annual forecast for sales and profitability as the core holiday shopping season kicks off this week with Black Friday.
Sales this fiscal year will be as much as $43.7 billion, down from previous guidance of $44.5 billion, the company said on Tuesday. The chain also reduced the high end of its outlook for adjusted earnings per share for this year by 10 cents to a high of $6.40.
The shares fell 4.6% at 8:00 a.m. during early trading in New York. Best Buy slid 15% this year through Monday, while the S&P 500 index advanced 18%.
Best Buy’s results echo a broader drop in discretionary spending from a year ago across retail. Macy’s Inc., Target Corp. and Gap Inc. also recently reported declines in same-store sales.
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Big-ticket items have been especially weak. At Best Buy, comparable appliance sales fell by 15% last quarter in the US. Same-store sales for all categories sank by 7.3% in the region. The retailer also called out softness in other pricey categories such as home theater and computing.
In a sign of just how unpredictable the holiday shopping season may be, Best Buy said its same-store sales will fall in a range of 3% to 7% in the fourth quarter.
“Consumer demand has been even more uneven and difficult to predict,” Chief Executive Officer Corie Barry said in a statement.
(Updates with details, CEO quote starting in fifth paragraph.)
