Investing.com – Best Buy stock (NYSE:BBY) slumped 16% Tuesday after the electronics retailer forecast lower comparable sales.
The forecast disappointed investors, coming at the start of the holiday season when electronic gadgets are among the most sought-after gift items.
A shortage of semiconductor chips used in electronic items has ensured that a lot of those products are in short supply, hurting retailers like Walmart (NYSE:WMT) and Best Buy. This includes gaming consoles from Sony and Microsoft’s Xbox as well as Apple’s iPhones.
Higher spending to ensure stores are stocked has taken a toll on the company’s profit margins.
Best Buy forecast fourth-quarter comparable sales to be in a range from down 2% to up 1%. Revenue for the period is seen at $16.54 billion at the midpoint.
Profit rate is seen declining by 30 basis points year-on-year.
Domestic revenue of $11 billion rose 1.2%, primarily driven by comparable sales growth of 2%, which was partially offset by the loss of revenue from permanent store closures in the past year, the company said.
Appliances, home theater systems and mobile phones drove sales higher.
Total revenue growth in the three months ended October 30 was mostly flat at around $12 billion. Adjusted profit per share was $2.08 and beat estimates.