Best Buy announced its third straight quarter of weaker-than-expected revenue and forecast comparable store sales will keep falling into the crucial holiday quarter. Fred Katayama reports.
Slowing sales of mobile phones ahead of the expected new iPhone launch next month hurt Best Buy, dragging revenue down for the third straight quarter. And that won't stop. America's largest consumer electronics retailer now forecasts its comparable store sales will keep falling into the crucial holiday quarter as well. It won't get any help from Canada and China, where it also sees sales extending their declines. The news wasn't all bad. U.S. Internet sales grew 22 percent as more consumers opted to pick up their online orders at nearby stores. Large-screen TV and appliance sales grew. And its cost cutting drive helped profit beat forecasts. Investors weren't buying Best Buy, sending shares lower in early trading. They're off more than 20 percent this year. But some analysts recommended that investors buy on the dips. J.P. Morgan analyst Christopher Horvers said, "We believe the upside to gross margin and expense cuts are tangible proof of Best Buy's success in turning the company." And Piper Jaffray's Peter Keith said it could get a boost from the iPhone launch.