Best Buy's top executives signaled Thursday that the retailer's high-flying sales growth of the past six months will once again slow down during the holidays.
The fourth quarter, which accounts for a third of the electronics chain's annual sales and half its annual profits, has been a rough go for the company in recent years with sales sliding during the past two Christmas seasons.
It's a time of year when more retailers sell electronics, which are popular gifting items, promotions become rampant, and pricing wars with competitors such as Amazon.com, Wal-Mart and Target become especially fierce.
So the "magnitude" of Best Buy's differentiation is often not as apparent during the holidays as it is during the rest of the months of the year, said CEO Hubert Joly.
This year, he said, Best Buy has factored in the potential for product shortages, which was a major issue last year. Executives are also mindful that consumers may not have as much money left for other purchases given the high price of the highly anticipated iPhone X that was introduced this this month, though he didn't specifically name it.
"There's a very iconic new phone that sells for $1,000 or more," he said. "There's a limit to the wallet of most consumers. We're always aware of that."
Best Buy raised its outlook for the holidays Thursday, which now calls for comparable sales growth of 1 to 3 percent. But that represents a deceleration from the 5.4 percent jump it logged over the summer and the 4.5 percent increase it reported Thursday in its fall quarter.
Best Buy's shares fell about 4 percent Thursday given the forecast, which also included lower profit targets than analysts had projected as the company said it was stepping up investments in e-commerce and supply chain and would have higher costs to pay employees more in incentive compensation due to the retailer's robust performance this year.
