Best Buy Cuts Guidance as Consumer Spending Falls

Best Buy slashed its fiscal 2009 profit forecast on Wednesday driven by weak consumer spending trends heading into the crucial holiday selling season.

Best Buy's announcement comes just two days after smaller electronics retail rival Circuit City Stores filed for Chapter 11 bankruptcy protection.

"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," Vice Chairman and Chief Executive Brad Anderson said in a statement.

Reed Saxon / AP Best Buy

Best Buy said comparable store sales fell about 7.6 percent in October after falling 1.3 percent in September. It said comparable store sales in November 2008 through February 2009 could decline by 5 percent to 15 percent, leading to an annual comparable store sales decline of 1 percent to 8 percent.

Best Buy forecast fiscal 2009 earnings of about $2.30 to $2.90 per share, down from a prior forecast of $3.25 to $3.40 per share.

Best Buy now expects annual revenue of $43.7 billion to $45.5 billion. The company's fiscal year ends in February.

Copyright 2008 Reuters. Click for restrictions.