http://www.bloomberg.com/apps/news?pid=20601087&sid=ahOItGFGUH2c&refer=home Best Buy Drops After Cutting Profit, Sales Forecast on Economy "Let's buy as many as we can on the 15 credit cards we have left, maxing the limits out, before filing for bankruptcy, and then we can resell them on eBay or Craigslist for 50 cents on the dollar and have some cash for Xmas." By Heather Burke Nov. 12 (Bloomberg) -- Best Buy Co. fell as much as 13 percent in New York trading after the U.S. electronics retailer said profit and sales will fall more than it expected during what may be the worst holiday shopping season in at least 23 years. Earnings for the year through February 2009 may drop to $2.30 to $2.90 a share, Richfield, Minnesota-based Best Buy said today in a statement. Revenue from stores open at least 14 months might plunge as much as 15 percent in the four months through February. ``Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen,'' Chief Executive Officer Brad Anderson said in the statement. ``Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year.'' Best Buy's forecast indicates consumers grappling with rising jobless rates and declining home values have stopped buying non-necessities as the holidays approach. Rival Circuit City Stores Inc. filed for bankruptcy protection Nov. 10, while department-store chains Macy's Inc. and Nordstrom Inc. have also forecast sales and profit declines, as the U.S. economy slumps in what may be the worst recession in three decades. ``Discretionary consumer spending has slowed dramatically,'' said Colin McGranahan, an analyst at Sanford C. Bernstein & Co. in New York. ``Best Buy's a great company, but it doesn't matter if people are not out buying TVs and PCs, which they weren't.'' Holiday sales at older stores may drop 1 percent from last year, according to a survey released today by America's Research Group and UBS AG. America's Research Group founder Britt Beemer said that's his first negative forecast in 23 years of conducting Christmas surveys. Shares Plunge Best Buy decreased $1.85, or 7.8 percent, to $22.03 at 9:56 a.m. in New York Stock Exchange composite trading. The shares fell 55 percent this year before today, exceeding the 39 percent decline by Standard & Poor's 500 Index. Full-year sales may rise to $43.7 billion to $45.5 billion, the company said. Best Buy, the largest U.S. electronics retailer, forecast in September adjusted full-year profit of $3.25 to $3.40 a share on revenue of $47 billion. Analysts surveyed by Bloomberg estimated profit of $3.04 a share on revenue of $46.4 billion. Spending declines accelerated in the first part of October after the Wall Street meltdown and increased job cuts led consumers to forgo most purchases. U.S. unemployment rose in October to 6.5 percent, the highest level since 1994, according to the Labor Department. Economists surveyed by Bloomberg News believe the economy will shrink at a 3 percent annual rate in the fourth quarter and decline at a 1.5 percent pace in the first three months of 2009, resulting the longest slump since 1974-75. `Difficult Times' ``In 42 years of retailing, we've never seen such difficult times for the consumer,'' Brian Dunn, Best Buy's president and chief operating officer, said in the statement. ``People are making dramatic changes in how much they spend, and we're not immune from those forces.'' Circuit City filed for bankruptcy after suppliers cut off credit and demanded cash for shipments. The chain lost market share to Best Buy and Wal-Mart Stores Inc., while Amazon.com Inc. and other online retailers undercut it with lower prices. Best Buy's new forecast ``doesn't look like much, if any, impact'' from Circuit City store closings, said McGranahan. He recommends investors hold Best Buy shares. Best Buy plans to report third-quarter earnings on Dec. 16.
I'm still looking for those down-in-the-basement bargains, but not much is coming up. Wasn't it Cutten who said that they have auctions for delinquent storage units? Is that the way to go? Fatwallet doesn't show much - guys on there are wondering where the real deals are too.
I'm seeing not sugar plums, but 42" 1080p LCD HDTVs for $550, dancing in my head. Fi fitty!! fi fitty!!
Circuit City is in Ch 11, I don't see how Best Buy can avoid it as well. This is going to be a dismal Christmas for retail and investors. But DAMN it's gonna be a great Christmas for traders!!!
The deals won't be out there. It doesn't work like that. Companies ( like Mervyn's ) go BK and then they sell-off their merchandise in "bulk" to other retailers . . . As a result, you won't be seeing anything over 30% off . . . and even if it is it will be "junk" that is discounted at that price and won't be sold off to other retailers.