Best Buy paints bleak picture
The retail trough deepened further today as Best Buy cut its profit forecasts
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and offered an alarming look at the short-term future of retail electronics. The Minneapolis-based company now expects earnings for the year to come in between $2.30 and $2.90 a share on sales of $43.7 billion to $45.5 billion. Same-store sales for that period could fall 1% to 8%, according to the company. Best Buy had previously expected earnings of $3.25 to $3.40 per share for the year, including an annual comparable-store sales gain of 2% to 3%. Analysts had expected earnings of $3.03 per share for the year.
"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," said Brad Anderson, vice chairman and CEO of Best Buy, in a statement. "Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year."
For its most recent quarter, comparable-store sales fell about 7.6%, following a modest decline in the previous quarter. A strengthening dollar could also pressure Best Buy's revenue and profit from international operations, the company said. The news comes just days after rival Circuit City filed for Chapter 11 bankruptcy protection and started closing more than 150 of its stores.
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