Best Buy cut its fiscal 2008 profit outlook Friday and said it expects its 2007 fourth-quarter sales to miss its own target on lower-than-expected January sales growth, sending its shares down 4.5 percent.
"The macroeconomic environment grew more challenging after the holidays," said Jim Muehlbauer, Best Buy's interim chief financial officer. "Our post-holiday results are not going to be what we originally expected."
The company now expects to earn $3.05 to $3.10 a share in fiscal 2008. Earlier, it had forecast per-share earnings of $3.10 to $3.20.
Analysts, on average, were expecting earnings of $3.17 a share, according to Reuters Estimates.
Best Buy also forecast sales of about $40 billion for fiscal 2008, on same-store sales growth of 2.5 to 3 percent. It had previously expected same-store sales to rise about 4 percent.
The company expects same-store sales to fall slightly in the fourth quarter, as sales of products like home theater systems, MP3 devices and video games were lower.
Shopper traffic declined in January, Best Buy said, as consumers continued to hesitate to part with their dollars in the face of higher food and fuel costs and a slow housing market.
Best Buy announced plans to open 85 to 100 new stores in the United States and 40 to 50 stores internationally -- moves the company said will add 12,000 retail jobs in various areas.
Best Buy shares dropped to $43.69 in premarket trade, while rival Circuit City's shares were down 3.6 percent at $4.86.