Best Buy profit, revenue fall

Best Buy Co., the world’s largest consumer electronics retailer, forecast full-year profit that trailed some analysts’ projections, citing economic challenges.

Excluding the effect of restructuring costs and stock buybacks, profit will be $3.30 to $3.55 a share, the Richfield, Minn.-based company said Thursday. Analysts on average projected $3.55, according to a Bloomberg survey.

Consumers are facing increasing pressure from unemployment and higher gas prices, which may lead them to curb spending, Chief Financial Officer Jim Muehlbauer said. Best Buy has posted back-to-back quarters of revenue declines as the competition for television bargain hunters escalates among retailers.

“The TV category is going to be very tough in the first half of the year,” said David Strasser, an analyst at Janney Montgomery Scott in New York.

Best Buy shares declined $1.72, or 5.4%, to $30.13, the most in three months. The shares have slipped 12% this year.

Net income in the fiscal fourth quarter that ended Feb. 26 fell 16% to $651 million, or $1.62 a share. Excluding items such as costs to close stores in China, earnings were $1.98 a share. Analysts surveyed by Bloomberg predicted $1.84 on average.

Revenue fell 1.8% to $16.3 billion.

Discounts helped boost comparable-store sales of smartphones as competition from Amazon.com Inc. and Wal-Mart Stores Inc. led to falling TV sales in Best Buy locations open at least 14 months. Best Buy Chief Executive Brian Dunn is reorganizing stores and retraining employees to push sales of gadgets that work together.

“Consumers are clearly telling us that they are interested in capturing all the benefits of a connected lifestyle, but they are also selective about how and where they spend,” Muehlbauer said. Sales in the second half probably will improve compared with the first as the company invests in its mobile business, he said.

Best Buy said last month that it would close all of its nine Best Buy branded stores in China to focus on expanding the more profitable domestic chain it acquired five years ago, while reducing costs in its U.S. supply-chain operations.

Tapping demand for mobile devices, Best Buy plans to open about 150 Best Buy Mobile stores in the U.S. in fiscal 2012.