Its shares fell 9% at the open on Tuesday as a drop in third-quarter comparable sales was much bigger than expected.
"We expected lower demand between sales events, but the impact was steeper than expected," CEO Corie Barry said on an earnings call, echoing Target (TGT.N) executives' comments that the response to promotions this year was stronger than earlier.
Best Buy's comparable sales in the U.S. fell 2.8%, compared with analysts' estimate of a 0.85% decline.
Despite easing inflationary pressures, customers have remained wary about spending on electronics, apparel, and home furnishings, and have held out for promotions.
Meanwhile, retailers, looking to counter a shorter holiday calendar this year, have rolled out deals much earlier.
Best Buy kicked off its Black Friday sale a week earlier and also brought back its "Doorbusters" event with deals on some items every Friday from Nov. 8 through Dec. 20.
"It can be very hard to stimulate demand (between promotional events) because the customer, regardless of the price point, just is not as interested in the product," Barry added, citing this as the reason for being "thoughtful" about fourth-quarter expectations.
The cut, just ahead of the Thanksgiving shopping event that encompasses Black Friday and Cyber Monday, adds to rising expectations of an uneven holiday season.
Deep-pocketed retailers such as Amazon (AMZN.O) and Walmart (WMT.N) have been more optimistic, with the latter lifting its annual targets and forecasting more demand from upper-income households.
Best Buy now expects annual comparable sales to decline between 2.5% and 3.5%, compared with between 1.5% and 3% earlier, while it also trimmed the upper end of its adjusted profit per share target.
Third-quarter profit per share of $1.26 also missed expectations of $1.29, according to analysts' data compiled by LSEG.
The results suggest the quarter was more challenging than previously anticipated, Truist Securities analyst Scot Ciccarelli said, pointing to Best Buy's history of driving better-than-guided margins.
Best Buy also addressed investor worries over President-elect Donald Trump's proposed increase to tariffs on imports from Canada, Mexico and China.
The company said it would have to pass on some costs from the possible tariffs onto customers with imports from China accounting for 60% of its cost of sales.
