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What: Shares of consumer electronics retailer Best Buy (NYSE:BBY) slumped on Thursday following the company's holiday sales report. Best Buy reported a decline in domestic comparable-store sales, lowering its sales guidance for the fourth quarter. At 3:30 p.m. Tuesday, the stock was down about 9%, after being down as much as 12.5% earlier in the day.

So what: Best Buy reported domestic revenue of $10.05 billion for the nine weeks ended Jan. 2, down 0.8% year over year. Comparable sales declined by 1.2% year over year both overall and in the domestic business, with 12.6% growth in online sales failing to make up for weak sales at Best Buy's stores.

The company pointed to particularly weak sales of mobile phones, as well as an industrywide decline in consumer electronics sales, as the main drivers of its weaker-than-expected holiday season. Comparable sales in the computing and mobile phones segment, a category that accounted for 42% of domestic holiday sales, declined by 6.7% year over year, thanks to both a slowing smartphone market and weak demand for PCs.

Other categories performed better for Best Buy. Domestic comparable consumer electronics sales rose 4.3% year over year, while appliance sales jumped 13.4%. However, computing and mobile phone weakness more than offset this growth. Due to the disappointing results, Best Buy cut its sales guidance for the fourth quarter, with the company now expecting domestic sales to slump 1.5% year over year, down from previous guidance calling for flat revenue.

Now what: While Best Buy likely gained market share in the consumer electronics category during the holiday season, it couldn't overcome weak demand for PCs and smartphones. With reports of Apple cutting orders for its iPhones, smartphone sales may continue to weaken, pressuring Best Buy's results going forward.

Investors will need to wait until Best Buy reports its full fourth-quarter results in order to get the full picture, but there's certainly reason to be disappointed in its holiday performance.

Timothy Green owns shares of Best Buy. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.