Best Buy predicts lower-than-expected holiday quarter sales, stock price drops Reuters

© Reuters. File photo: On November 22, 2021, the Best Buy logo can be seen in a store in Manhattan, New York City, USA. REUTERS/Andrew Kelly

(Reuters)-Best Buy on Tuesday forecast fourth-quarter comparable sales to be lower than analysts’ expectations, as the electronics retailer is preparing for a possible product shortage in the critical holiday shopping season.

The company’s stock price fell 9.4% to $125 in pre-market trading.

With transportation stalled, Asian factory closures, and scarcity of raw materials sweeping the global supply chain and leading to product shortages, retailers are facing tremendous pressure to maintain shelf inventory during the holidays.

The shortage of semiconductor chips used in electronic products has weakened the supply of some high-demand products, including Sony Corporation (T:), Nintendo Co., Ltd. (T:) and Microsoft Corporation (Nasdaq:).

According to Refinitiv’s IBES data, Best Buy predicts that comparable sales will fall between 2% and 1% in the fourth quarter, with the midpoint lower than the expected increase of 0.1%.

The company’s comparable sales in the third quarter increased by 1.6%, while expectations fell by 0.3%.

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