Best Buy on Wednesday warned that weaker spending brought by the collapse of financial markets is forcing the consumer electronics giant to slash full-year estimates.
The Minneapolis-based electronics giant said concerns over consumer spending have left the retail giant uncertain of its revenue targets during the holiday season, its biggest quarter of the year. Sales in the November 2008 to February 2009 quarter could decline by 5 percent to 15 percent, Best Buy warned.
“The current consumer spending pattern is unlike anything we have ever seen,” Credit Suisse analyst Gary Balter wrote Wednesday in a research note. “This is not 1990-91 or anything similar to the last twenty five years.”
Best Buy shares were down $1.63, or 6.8 percent, at $22.25 in midday trading.
The big-box retailer lowered earnings guidance to earnings per share ranging $2.30 to $2.90 on revenue of $43.7 billion to $45.5 billion. Best Buy previously forecast earnings of $3.25 to $3.40 per share on sales of $47 billion.
Best Buy’s U.S. store sales plummeted 7.6 percent for October after a 2.4 percent slide in September.
"In 42 years of retailing, we've never seen such difficult times for the consumer, Chief Operating Officer Brian Dunn said in the statement.
Best Buy is not alone. Richmond, Virginia, rival Circuit City on Monday filed for bankruptcy protection after it failed to make enough cash to stay alive and ran into credit problems with vendors. That move sent Circuit City stock 56 percent lower to $0.11 per share Monday as consumers circled in on liquidation sales.