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Un-Merry Christmas: Best Buy Shares Drop 27%

Santa was not very good to Best Buy this Christmas.

Shares of the world's largest consumer electronics chain slumped 27 percent in early trading on Thursday after it said sales dropped during the holiday shopping season, even though gadgets were among the hottest gift items.

Best Buy pinned the drop on intense discounting by rivals, supply constraints for key products and weak traffic in December. Sales at its stores open at least 14 months were down 0.9 percent in the United States and up 0.1 percent internationally in the nine weeks ended Jan. 4.

Total revenue fell about 2.6 percent to $11.45 billion in the nine-week period.

The chain cut prices aggressively to thwart fierce competition from Wal-Mart Stores and other rivals in what turned to be one of the most promotional seasons since the recession.