Best Buy (BBY) came out and reduced FY earnings and the news sent the stock down over 3% Friday. Knowing Best Buy is well run and Circuit City (CC) is not, investors sent City shares down twice that.
For the fiscal year ending March 1, Best Buy reduced its outlook to per-share earnings of $3.05 to $3.10 from $3.10 to $3.20. Expected same-store sales growth was cut to 2.5% to 3% from 4%, and the company maintained its outlook for revenue of about $40 billion.
CEO Brad Anderson said that although the company’s December results were in line with expectations, “soft domestic customer traffic in January, coupled with our near-term outlook, now indicate that our fourth-quarter revenue will fall short of our planned targets.”
Circuit City has said nothing specific about upcoming numbers (assume the worst) but did do something noteworthy.
After Best Buy, Wal-Mart (WMT) and NetFlix (NFLX) announced they will go exclusively with the “Blue-ray” HD DVD format, Circuit City, apparently the last one in the loop was forced to price cut a stand-alone HD player that plays both Sony Corp.’s Blu-ray disc and Toshiba Corp.’s HD DVD format titles by $100.
I can’t wait to hear CEO Schoonover’s excuse for the latest quarter. Maybe, “Perhaps were overly optimistic about a cash strapped consumers willingness to buy soon to be irrelevant technology”.
Disclosure (“none” means no position):Long Wal-Mart, None
