Days after competitor Circuit City filed for bankruptcy protection, Best Buy (Minneapolis), the nation’s largest electronics retailer, has cut its full-year profit forecast, citing continued weakness in consumer spending that it says has been exacerbated by the recent turmoil in the financial markets. According to a company statement, the “uncertainty regarding future consumer spending” would limit the company’s ability to project revenue for the critical holiday shopping season.
“Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen,” says ceo Brad Anderson. “Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year.”
The November-December holiday shopping period typically accounts for more than 50 percent of the retailers' annual profits and sales. The company has revised its earnings for the year to be between $2.30 and $2.90 a share on sales of between $43.7 billion and $45.5 billion. It says same-store sales for the period could decline between 1 to 8 percent. The company previously had forecast 2008 earnings of between $3.25 to $3.40 based on a same-store sales increase of 2 to 3 percent for the year.