Best Buy cut its fiscal 2008 profit outlook and said it expects its
2007 fourth-quarter sales to miss its own target on lower-than-expected
January sales growth.
NEW YORK (Reuters) - Best Buy Co Inc cut its fiscal 2008 profit outlook on Friday and said it expects its
2007 fourth-quarter sales to miss its own target on lower-than-expected
January sales growth, sending its shares down 4.5 percent.
"The macroeconomic environment grew more challenging after the
holidays," said Jim Muehlbauer, Best Buy's interim chief financial
officer. "Our post-holiday results are not going to be what we
originally expected."
The company now expects to earn $3.05 to $3.10 a share in fiscal
2008. Earlier, it had forecast per-share earnings of $3.10 to $3.20.
Analysts, on average, were expecting earnings of $3.17 a share, according to Reuters Estimates.
Best Buy also forecast sales of about $40 billion for fiscal 2008,
on same-store sales growth of 2.5 to 3 percent. It had previously
expected same-store sales to rise about 4 percent.
The company expects same-store sales to fall slightly in the fourth
quarter, as sales of products like home theater systems, MP3 devices
and video games were lower.
Shopper traffic declined in January, Best Buy said, as consumers
continued to hesitate to part with their dollars in the face of higher
food and fuel costs and a slow housing market.
Best Buy announced plans to open 85 to 100 new stores in the United
States and 40 to 50 stores internationally -- moves the company said
will add 12,000 retail jobs in various areas.
Best Buy shares dropped to $43.69 in premarket trade, while rival Circuit City's (shares were down 3.6 percent at
$4.86.
(Reporting by Aarthi Sivaraman, editing by Gerald E. McCormick and Dave Zimmerman)
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