Best Buy Issues Profit Warning

Best Buy reduced its profit expectations for its fiscal year 2008 ending March 1, 2008. The company now expects earnings per diluted share to be $3.05 to $3.10, down about 2.5% from the previous guidance of $3.10 to $3.20 per share.

The company said that store sales will decline "modestly" for the fiscal fourth quarter, reflecting "changes in the macro environment". As a result, the company is projecting about $40 billion in revenue for fiscal 2008, including an annual comparable store sales gain of 2.5% to 3%, compared with previous guidance of about 4%. Affected segments of revenue decline are home theater, MP3 devices, digital imaging and video gaming. Best Buy noted that the lower revenues in video gaming were due to "industry-wide temporary inventory shortages in the United States during January".

"The macro-economic environment grew more challenging after the holidays," said Jim Muehlbauer, Best Buy’s interim CFO. "Our post-holiday results are not going to be what we originally expected."

The company said that it will be opening 130 to 160 new stores in its 2009 fiscal year.