NEW YORK (AP) — Electronics retailer Best Buy said Tuesday that its third-quarter net income fell 29 percent as it cut prices in popular categories such as tablets and TVs to drive sales and traffic during the busy holiday season.
Its adjusted earnings missed analysts’ expectations, and its shares tumbled almost 9 percent in premarket trading.
Best Buy Co. is facing tough competition from discounters and online retailers. The largest U.S. specialty electronics retailer said it increased mark downs in categories such as mobile computing — which includes tablet computers — TVs and movies to drive traffic and sales, hurting its gross profit. It also spent more on advertising.
“We took actions to provide value to customers and drive our business in this competitive consumer environment,” said CEO Brian Dunn.
Net income for the three months ended Nov. 26 fell to $154 million, or 42 cents per share. That compares with $217 million, or 54 cents per share, last year.
Excluding one-time items, its adjusted earnings totaled 47 cents per share. Analysts expected 52 cents per share, according to FactSet.
The Minneapolis company said revenue rose 2 percent to $12.1 billion from $11.9 billion a year ago. Analysts expected $12.13 billion.
Revenue in U.S. stores open at least one year rose 1 percent, boosted by a 20 percent increase in online revenue.
Strong sellers during the quarter included mobile computing, appliances, e-readers, mobile phones and movies. Digital imaging and gaming were weaker.
Best Buy reaffirmed its full-year guidance of adjusted net income of $3.35 to $3.65 per share. Analysts expect $3.44 per share.
It expects revenue of $51 billion to $52.5 billion. Analysts expect $51.83 billion.
Shares fell $2.50, or 8.9 percent, to $25.57 in premarket trading.
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