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Holiday Heartbreak: Some Retailers Struggle, Others Triumph
Andrew R. Hickey
Consumer electronics retailers are keeping a keen eye on consumer spending trends as the holidays draw closer. Some have posted poor quarterly results with chopped projections, citing the rough economy and waning consumer confidence. Others have been hit harder, filing for Chapter 11 bankruptcy. Still, there are a crop of retailers that expect to buck the trend and hit their targets during the ever-important November-December shopping season, where, typically, retailers can realize a 50 percent sales bump.
But to paraphrase Best Buy's president and COO Brian Dunn: No retailers are immune to the turbulent economic waters.
Here, we take a look at some of the nation's top consumer electronics retailers and their current financial situation.
Who will flounder and who will flourish?
Best Buy Minneapolis-based Best Buy, the nation's largest consumer electronics retailer, painted a bleak picture this week, announcing that global comparable store sales, which measure sales at stores open for at least 14 months, dropped by 7.6 percent in October, following a slight drop of 1.3 percent in September.
That two-month stretch prompted Best Buy brass to cut its full-year profit forecast, saying a comparable store could drop between 5 percent and 15 percent in the remaining months of fiscal 2009, resulting in an annual comparable store sales decline of 1 percent to 8 percent. Best Buy said it now expects earnings for the year to be between $43.7 billion and $45.5 billion, or between $2.30 and $2.90 a share. Best Buy had previously provided earnings guidance of $3.25 to $3.40 per share for fiscal 2009, based on an annual comparable store sales increase of 2 percent to 3 percent.
Economic uncertainty and questions around consumer spending prompted Best Buy president and COO Brian Dunn to proclaim: "In 42 years of retailing, we've never seen such difficult times for the consumer. People are making dramatic changes in how much they spend, and we're not immune from those forces."