Best Buy (NYSE: BBY) reported on Thursday disappointing third-quarter results and forecast holiday-quarter profit below Wall Street's estimates as the company cuts prices to match those offered by rivals such as Amazon.com Inc (NASDAQ: AMZN)
Retailers like Best Buy and Target (NYSE: TGT) are offering free shipping in the holiday quarter to boost online sales even if it hurts company's bottom line.
The company forecast adjusted earnings of $1.89 to $1.99 per share for the fourth quarter, while analysts expected the company to earn $2.03 per share.
Best Buy's same-store sales rose 4.4% in the quarter ended Oct. 2 but missed the analysts' average estimate for a 4.8% rise as it was hurt by the late launch of the iPhone X and hurricanes.
The Richfield, Minnesota-based company's net income rose to $239 million, or 78 cents per share, in the quarter, from $194 million, or 61 cents per share, a year earlier.
According to CEO Hubert Joly, "Technology innovation is fueling demand and our strategy is resonating with our customers. We are also making significant progress against our Best Buy 2020 strategy and are excited about the opportunities for long-term value creation.
"And while we are investing in key initiatives and capabilities, we are also able to generate significant returns for our shareholders through the growth of our EPS and our capital allocation strategy."
BBY shares shed $3.57, or 6.2%, to $53.73 in mid-morning trading on Thursday, within a 52-week trading range of $39.43 to $63.32.
