For the first quarter, the company projects Enterprise comparable sales decline of 1 percent to 2 percent, and domestic comparable sales decline of 1.5 percent to 2.5 percent.
The company said revenue was $13.48 billion in the quarter ended January.
Still, the company did hand out sweets to investors: it raised its quarterly dividend 21% to 34 cents a share and announced an accelerated share repurchase plan that goes from $1 billion over two years to $3 billion over two years.
For the current period, the company expects adjusted per-share earnings in the range of 35 cents to 40 cents, below the consensus estimate of 49 cents.
Comparable store sales in the USA were down 0.9 percent in the quarter and overall revenue was down slightly to $13.48 billion, lower than the $13.62 billion analysts expected.
Further, the company announced a 21 percent increase in regular quarterly dividend to $0.34 per share.
Best Buy reported lagging sales in the fourth quarter and delivered a weak outlook as the nation's largest electronics chain grappled with a shortage of popular items like drones and tablets that is expected to continue well into this year.
The disappointing earnings report comes as Wall Street is watching big-box retailers closely for signs of hardship.
Best Buy's shares fell 9.4 percent to $40 at 7:08 a.m.in early trading in NY.
Best Buy Co. posted a surprise decline in revenue in the final quarter of the year as it struggled to make certain products available to customers. Analysts expected earnings of $1.67 per share on sales of $13.62 billion for the quarter.
Best Buy's domestic same-store sales fell 0.9%.
Shares, which have risen 34% over the last twelve months, dropped 4% to $42.27 in pre-market trading. Domestic online revenue grew 18% on a comparable basis on increased traffic and better conversion rates.
In order to execute the two-year $3 billion share repurchase plan, the board of directors approved a new $5 billion share repurchase authorization for the company's common stock, superseding the existing authorization dated June 2011 which had $2.2 billion in purchases remaining.
In Best Buy's much smaller global segment, revenue increased 2.5%, driven by growth in Mexico.