Best Buy’s third-quarter profit was up 19 percent year over year, hitting $239 million, but it was a letdown for Wall Street analysts and shareholders alike and the company warned that the upcoming holiday selling season may disappoint too.
The fourth-quarter outlook came a week after the chain upped its long-standing price-matching policy to include free shipping for the holiday selling season, which is expected to eat away at margins.
Same-store sales rose 4.4 percent in the quarter ended Oct. 2, missing analysts’ average estimate of a 4.8 percent rise. The company said in a statement that revenues were hurt by the extreme hurricanes of the last months and the later-than-expected launch of Apple’s iPhone X, estimating that the late iPhone launch cost it about $100 million. Industry analysts had expected the phone to be launched by the end of September.
Best Buy’s revenue rose 4.2 percent to $9.32 billion, falling short of Wall Street expectations by about $40 million.
On the plus side, Best Buy’s domestic online comp sales reached 22.3 percent and generated $1.1 billion for the quarter, the fourth consecutive quarter with more than $1 billion in domestic online revenue.
The chain has now recorded positive comps in five of the past six quarters and 10 of the past 13 quarters, and increased its full-year guidance for the third quarter in a row.
Best Buy now expects revenue growth of between 4 and 4.8 percent on a 53-week basis, up from the prior outlook of 4 percent. Full-year non-GAAP operating income growth in now forecast to be between 7 percent and 9.5 percent.