Best Buy Cuts Outlook After Sales Drop

MINNEAPOLIS -- Electronics retailer Best Buy (BBY Quote) says it is sharply cutting its fiscal 2009 earnings outlook below analyst estimates amid what the company called the toughest retail environment it has ever seen.

Richfield, Minn.-based Best Buy expects earnings per share between $2.30 and $2.90 for the fiscal year ending in February, down from a prior estimate between $3.25 and $3.40 per share.

The retailer forecast revenue between $43.7 billion and $45.4 billion, as well as 1% decline in same-store sales, or sales at stores open at least 14 months.

Analysts expect earnings of $3.02 per share and sales of $46.23 billion for fiscal 2009, according to a Thomson Reuters survey.

Best Buy's same-store sales dropped 7.6% in October. Same-store sales are a closely watched performance indicator because they measures sales at existing locations rather than newly opened ones.

CEO Brad Anderson said "seismic" changes in consumer behavior have created "the most difficult climate" ever seen by the company.

Best Buy also says the stronger dollar will weaken revenue and profit from its international segment more than previously expected.