Nov 12 2008
Best Buy Reacts to the Bad Economy, Lowers Profit Projections
In what may be a bad omen for the Christmas shopping season, Best Buy announces a lower profit forecast:
NEW YORK (CNNMoney.com) — Best Buy, the No. 1 electronics retailer, cut its full-year profit forecast Wednesday, citing continued weakness in consumer spending that it says has been exacerbated by the “recent turmoil in the financial markets.”
The company also said “uncertainty regarding future consumer spending” would limit its ability to project revenue for the critical holiday shopping season.
That’s a huge problem since the November-December holiday shopping months typically account for 50% or more of retailers’ annual profits and sales.
“In 42 years of retailing, we’ve never seen such difficult times for the consumer,” Brian Dunn, president and chief operating officer of Best Buy, said in a statement. “People are making dramatic changes in how much they spend, and we’re not immune from those forces.”
In the wake of Circuit City filing for Chapter 11, one would expect a bump in sales for Best Buy. Clearly, they see this economy getting worse before it gets better.
