Best Buy’s revenue fell more than had been expected during the electronic giant’s first quarter. Prior to the release of the quarterly earnings report, the stock had been one of the best performing of the year in the S&P 500.
The electronics retailer announced that its revenue had dropped by 9.6% to end the quarter at $9.4 billion, which was well below sales of $10.8 million forecast by Wall Street analysts.
Sales at stores in the U.S. open at least 12 months were down 1.1%, while in stores outside the United States, sales dropped by 2.8%.
Company officials attributed part of the fall in sales to the Super Bowl being in the company’s fourth quarter this year and in the first quarter last year. The NFL final game is a huge driver of sales of large screen TVs. However, sales also suffer because of the decision by the company to reduce sales in specific non-core businesses.
Operating income for Best Buy from continuing business dropped 54% from the same time a year earlier, but that still topped analyst’s estimates.
However, weak sales succeeded to spook some of the company’s investors as Best Buy stock shares fell in Tuesday’s premarket trading after the report was released. Nevertheless, the company is still the S&P 500 Index’s third best stock thus far in 2013.
The electronics retailer has seen much more competition from retailers online like Amazon. In February, Best Buy announced it would expand its price match guarantee so it could compete better.
The company is also amidst an effort in cost-cutting including closing a number of stores. In April, the company announced it would sell 50% of its stake in its operations in Europe. Results in the first quarter were partially affected by those moves.
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