Best Buy lowers FY outlook
MINNEAPOLIS Best Buy reported that it is lowering its fiscal year guidance in response to falling consumer spending, driven by the recent turmoil in the financial markets and other macro economic factors.
Factoring in year-to-date results, the high end of the company’s revenue range now includes annual revenue of $45.5 billion (including Best Buy Europe), an annual comparable store sales decline of approximately 1%, and annual earnings per diluted share guidance of approximately $2.90. The low end of the company’s revenue range includes annual revenue of $43.7 billion, an annual comparable-store sales decline of approximately 8%, and annual diluted EPS guidance of approximately $2.30. The midpoint of the new earnings range represents a decline of approximately 17 percent compared with diluted EPS of $3.12 for fiscal 2008, and it assumes that revenue for the balance of the year is generally consistent with the company’s October comparable-store sales decline of 8%.
The company previously had provided earnings guidance of $3.25 to $3.40 per share for fiscal 2009, including an annual comparable-store sales gain of approximately 2% to 3%. The average analyst estimate of Best Buy’s fiscal 2009 earnings on First Call on Nov. 10 was $3.03 per diluted share.
“Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we’ve ever seen. Best Buy simply can’t adjust fast enough to maintain our earnings momentum for this year,” said Brad Anderson, vice chairman and ceo of Best Buy. “We’re beginning to adjust our cost structure to restore earnings momentum and still gain market share. We firmly believe that our strategy of customer centricity is of great value in driving our performance versus the industry, and that’s the strategy we plan to pursue to continue to strengthen our position in the marketplace.”
The company’s total comparable-store sales declined by approximately 7.6% for fiscal October, following a modest comparable-store sales decline for fiscal September.