By Chris Burritt - Dec 23, 2011 4:12 AM GMT+0700
Best Buy Co. (BBY), the world’s largest consumer-electronics retailer, canceled some customers’ online orders after it ran out of popular merchandise.
“Overwhelming demand of hot product offerings” on BestBuy.com led to the cancellations, Lisa Hawks, a spokeswoman for the Richfield, Minnesota-based retailer, said today in an e- mail. She declined to disclose the number of orders that won’t be filled or identify the items.
The canceled orders covered the weekend after Thanksgiving, when Best Buy stepped up discounts against Amazon.com Inc. (AMZN) and Wal-Mart Stores Inc. (WMT) Best Buy promoted “aggressively online,” leading to higher traffic and an increase in sales by stores open at least 14 months, Chief Executive Officer Brian Dunn told analysts on Dec. 13.
“I presume it’s not particularly material, but the bad press is enough to scare some people away from ordering online at Best Buy in the future, so it’s not positive,” Michael Pachter, an analyst at Wedbush Securities in Los Angeles, said today by e-mail. He rates the shares “neutral.”
Online revenue in the U.S. climbed 20 percent in the third quarter ended Nov. 26, outpacing overall domestic comparable- store sales growth of 0.9 percent, the company said.
Increased discounts on products such as flat-panel televisions and mobile devices hurt profit in the third quarter, leading to a 29 percent decline in net income.
Best Buy rose 1.5 percent to $23.22 at the close in New York. The shares have tumbled 32 percent this year.
The Associated Press reported earlier on the cancellations.
To contact the reporter on this story: Chris Burritt in Greensboro at cburritt@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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