Best Buy lowers earnings forecast
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FEB. 20 | Best Buy lowered its earnings and same-store sales expectations for fiscal 2008 on lower post-holiday revenue from some of its home entertainment products.
Earnings for the year ending March 1 will be as much as $3.10 a share, down from its prior forecast of as much as $3.20 a share, the largest U.S. electronics retailer said last week. Same-store sales will rise 2.5% to 3%, less than its previous estimate of 4%.
Best Buy had lower post-holiday sales from home theater equipment and from MP3 and videogaming devices. The company blamed lower videogame device revenue on an industry-wide inventory shortage last month.
“Our post-holiday results are not going to be what we originally expected,” said Best Buy interim chief financial officer Jim Muehlbauer in the Feb. 15 statement. “The macro-economic environment grew more challenging after the holidays.”
Best Buy fiscal 2008 revenue will be almost $40 billion. The company was expected to earn $3.08 a share on $39.8 billion in revenue, the average estimates in a Thomson Financial survey.
The company also said last week it would boost its U.S. store count by between 9% and 12%, and its overseas store count by between 10% and 12%.
Last month, Best Buy said its December same-store sales increase slowed to 1.5%, or 3% adjusted for the loss of Thanksgiving weekend, from 7% a year earlier. Consumer electronics accounted for 46% of total revenue, down from 48% a year earlier.
The company didn’t break out January sales last week.
Best Buy shares fell $1.15, or 2.5%, to $44.62 on Feb. 15. They closed at $44.01 yesterday.
