NEW YORK (CNNMoney) — Best Buy's sales fell more than expected in its fiscal first quarter, creating a speed bump for one of the year's best performing stocks among the S&P 500.
The electronics retailer reported that revenue fell 9.6% to $9.4 billion, far below the sales of $10.7 billion forecast by analysts surveyed by Thomson First Call.
Sales at U.S. stores open at least a year were off 1.1%, while sales fell 2.8% at stores outside the U.S.
The retailer attributed some of the decline to the fact that the Super Bowl was in its fiscal fourth quarter this year rather than its first quarter a year earlier. The game is a major driver of large screen television sales. But sales were also hurt because of the company's decision to reduce sales in certain non-core businesses.
Best Buy's operating income from continuing operations fell 54% from a year earlier, but that topped forecasts.
But the weak sales spooked some investors, as shares of Best Buy fell in premarket trading following the report. The company remains the third best performing stock in the S&P 500 so far in 2013.
Best Buy has been facing increased competition from online retailers such as Amazon. In February ,it announced it was expanding its price-match guarantee to better compete.
It has also been engaged in a cost-cutting effort that includes closing stores. Last month, it announced it was selling half of its stake in its European operations. Some of those moves affected its first quarter results.
The turnaround plans have been led by its Hubert Joly, who was named CEO in August. Investors have generally been supportive of his efforts, sending shares up 126% so far this year through Monday's close.
Despite the sales decline, Brian Sozzi, chief equities strategist at Belus Capital Advisors, said he's not discouraged by the report.
"If you peer deep into the soul of Best Buy's performance, it should reaffirm the very reason the stock has zoomed in 2013," he wrote in a note to clients Tuesday. "That reason: an operational overhaul that is both removing oodles of wasteful processes and repositioning the company for relevance in a competitive industry."
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