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Best Buy admits Q4 sales were terrible... just like everyone else

Akin Oyedele   

Best Buy admits Q4 sales were terrible... just like everyone else
Tech2 min read

Best Buy shares dropped as much as 3% in pre-market trading Thursday after the company reported fourth-quarter results.

The consumer-electronics retailer reported a 1.5% decline in domestic revenue.

But America's largest electronics retailer wants shareholders to know that it's been ugly across the consumer-electronics-industry board.

Here's CEO Hubert Joly in the release (emphasis ours):

In our domestic business, we exceeded our bottom-line expectations due to a well-executed holiday plan, a disciplined promotional strategy, better recovery on returned and clearance product and strong expense management.

While domestic revenue declined 1.5%, it was against a backdrop where the NPD-reported categories were down 5.1%. In addition, we continued to drive significant growth in the online channel - with eCommerce revenue increasing nearly 14% to 15.6% of total Domestic revenue.

As the company explains in a footnote, the NDP Group's weekly tracking service published February 8, showed that revenues for the consumer-electronics industry fell 5.1% during the three months ended January 30, 2016. Sales of consumer electronic products - from TVs to tablets, and excluding cellphones - makes up about 65% of Best Buy's revenues.

Best Buy also noted that it had a hard time selling phones.

"As it relates to Q1 FY17, in the Domestic business, we believe that the softness that we saw in the NPD-tracked categories and mobile phones will continue," said Sharon McCollam, the company's executive vice president.

The company reported net income of $479 million, or $1.40 a share, which was an 8% drop from the prior year, and higher than analysts had expected.

Quarterly sales fell 4.1% to $13.6 billion, in line with estimates.

Same-store sales - at stores open for at least one year - fell 1.7%, more than the 1.3% that analysts had estimated.

Last month, the company reported that a sales decline for the holiday season. And from the forthcoming fiscal year, Best Buy will no longer report its holiday-sales numbers because of how important January is to the overall fourth-quarter results.

Best Buy shares have fallen about 20% over the past 12 months, and are down 3% year-to-date.

h/t @philwahba

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