HO-HUM HOLIDAY

Sluggish demand for phones caused a less-than-jolly Christmas for Best Buy,

Best Buy Co. fell as much as 6.8 per cent in early trading after reporting a decline in holiday sales, hurt by sluggish demand for mobile phones and broader slump in the electronics industry.

Domestic same-store sales fell 1.2 per cent in November and December, the Richfield, Minn.-based company said in a statement Thursday. That compares with a 3.4-percent gain in the year-earlier period.

Fewer customers upgraded their phones during the period, weighing on sales. Still, the retailer outperformed the rest of the industry, which faces steeper declines, chief executive officer Hubert Joly said. The company also saw strength in health products, home theatre and appliances, he said.

“We grew the business, excluding mobile phones, in a backdrop with a retail industry that was tough,” he said in a call with reporters.

The stock dropped as low as $27.28 in premarket trading after the results were posted. The shares were down 22 per cent last year.

Though Joly has made progress in cutting costs, investors are getting increasingly impatient about the chain’s inability to revive growth. The CEO, now in the fourth year of a turnaround plan, has shored up profit by selling off foreign divisions. But consistent sales increases have yet to materialize. The most recent holiday decline was the company’s third in the past four years.

Best Buy and other retailers entered the holiday season warning that the electronics market in the U.S. was weak. Even so, key categories tracked by research firm NPD Group Inc. were even worse than expected, Best Buy said on Thursday.

Half of Best Buy’s earnings typically come in the fourth quarter, so Wall Street closely watches its holiday sales. After sales fell during the 2013 holidays, the stock sank by a third in two days. The shares also took a hit after the 2011 Christmas season when revenue missed estimates.