Best buy On Tuesday, the company cut its full-year sales forecast, missing Wall Street’s quarterly sales expectations, as early holiday shopping and a new batch of iPhones and AI-enabled laptops weren’t enough to spur higher sales.

The consumer electronics retailer said it now expects full-year sales of $41.1 billion to $41.5 billion, compared with its previous forecast of $41.3 billion to $41.9 billion. The company expects full-year comparable sales to decline 2.5% to 3.5%, compared to previously expected declines of 1.5% to 3%. Comparable sales include sales online and in stores open for at least 14 months.

Best Buy shares closed Tuesday at $88.48, down nearly 5%.

On an earnings call, CEO Corie Barry said the retailer experienced “weaker than expected sales,” particularly in September and October.

“We attribute this to a combination of overall ongoing macroeconomic uncertainty, customers waiting for deals and sales and pre-election distraction, particularly in non-essential categories, (and) expected lower demand between sales events,” she said. “But the impact was even steeper than we estimated.”

Barry added that demand has picked up in recent weeks as holiday sales gained momentum and election concerns eased. Still, Best Buy has muted expectations for the holiday quarter.

The company expects comparable sales to range from flat to a decline of 3% in the fourth fiscal quarter.

Speaking to reporters, Barry said Best Buy is dealing with some challenging dynamics, including a five-day shorter holiday season. She said buyers respond to big deals and sales events. Still, sales peaks are expected to be higher during times like Black Friday and Cyber ​​Monday, but the troughs before and after are expected to be lower, she said.

Here’s what the retailer reported for its fiscal third quarter compared to Wall Street expectations, according to an LSEG analyst survey:

• Earnings per share: $1.26 adjusted vs. Expected $1.29
• revenue: $9.45 billion versus expected $9.63 billion

In the three-month period ended November 2, Best Buy’s net income rose to $273 million, or $1.26 per share, from $263 million, or $1.21 per share, a year earlier.

Net sales fell to $9.45 billion from $9.76 billion in the same quarter last year.

After a roughly two-year decline in sales in the consumer electronics category, Best Buy is awaiting a wave of shoppers replacing old devices and upgrading to new, higher-tech devices. A number of factors have hit the retailer’s sales, including the surge in purchases of items such as laptops, home theater systems and kitchen appliances during the Covid pandemic; the decline in discretionary purchases as Americans spent more on food and other essentials due to inflation; and the shift back to spending on services, including travel and dining out.

In recent quarters, CEO Barry and CFO Matt Bilunas have stated that they expect this year to bring “increasing stabilization in the industry.” Barry also discussed Best Buy’s expectation that new gadgets, including Apple’s new iPad collection as well as artificial intelligence laptops from Microsoft, will boost sales.

But the debut of these devices wasn’t enough to significantly boost Best Buy’s quarter. Comparable sales fell 2.9% companywide and 2.8% in the U.S

Best Buy said weak sales in appliances, home theaters and games contributed to the comparable sales decline, but was partially offset by growth in computers, tablets and sales in the services category. The company offers services such as installing technology in customers’ homes.

Digital sales were also weak, down 1% year-over-year in the US

Barry said on the earnings call that Best Buy is “curious” about AI-enabled phones, but she said “a lot of these innovations are still ahead of us.” She said cell phone trends were down compared to last year but had improved slightly compared to the second quarter.

“We’re still in the early stages – and I would say that broadly about AI in general,” she said.

Tariffs could also threaten Best Buy’s sales if they result in higher costs for the company and customers. President-elect Donald Trump said in a Truth Social post Monday that he would increase tariffs on all Chinese goods by another 10% and impose 25% tariffs on imports from Mexico and Canada. During the election campaign he proposed even higher tariffs.

According to Barry, China records the highest import volumes for goods sold by Best Buy, followed by Mexico. She said the higher costs from the tariffs would be shared by the company, suppliers and customers.

“These are goods that people need, and higher prices are not helpful,” she said.