Best Buy's fourth quarter is typically the star of the brand's fiscal year, but a lack of product availability cut into sales and drove down its outlook for the current quarter.
Best Buy CEO Hubert Joly said Q4 revenue at the consumer electronics chain was "hindered by unprecedented product availability" as well as considerable weakness in gaming, tablets, wearables, and mobile phone sales.
Best Buy had cautioned investors back in November that the Samsung Galaxy Note 7 recall could hurt comparable sales in the fourth quarter by as much as $200 million, and that's now turned out to be the case. The retailer reported a 0.9-percent decline in US same-store sales versus an expected increase of 0.4 percent.
Joly also told analysts on a conference call that the stunted supply of other in-demand electronics also likely caused the retailer to miss out on another $100 million to $200 million in potential sales.
On the bright side, Best Buy managed to grow domestic online sales by 17.5 percent and boost its margin.
As for the rest of the numbers, Best Buy posted a Q4 net income of $607 million, or $1.91 per share, up from $479 million, or $1.39 per share, a year earlier. Total fourth quarter revenue was $13.48 billion billion with earnings of $1.95 per share.
Wall Street was expecting revenue of $13.62 billion on earnings of $1.67 per share. Best Buy's shares dipped more than 10 percent in pre-market trading Wednesday before mostly recovering.
Looking ahead, Best buy expects to report Q1 EPS in the range of 35 cents to 40 cents, compared with 49 cents expected by Wall Street.
"Our annual outlook is influenced by a number of factors, including expected share gains and the positive impact from our new initiatives, offset by our assumption that the industry growth will remain negative, similar to the last two years, and product availability issues will continue, particularly in the first half of the year," said Best Buy CFO Corie Barry.
Best Buy is now trying to enact the phase of its turnaround plan, which Joly said will focus on expanding the brand's online and multichannel business, cutting costs, accelerating growth in Canada and Mexico, and investing in people and systems.
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