* Dec. sales down 6.5 pct
* Sees FY09 EPS of $2.50-$2.70, prior view $2.30-$2.90
* Circuit City in deal talks
* Best Buy shares down over 5 pct
(Adds voluntary exit, share activity, analyst comments)
ATLANTA, Jan 9 Best Buy Co (BBY.N), the top
specialty retailer of consumer electronics, narrowed its
full-year profit forecast on Friday after reporting weak
December sales, sending its shares down more than 5 percent.
Best Buy said same-store sales in December fell 6.5 percent
during the worst U.S. holiday shopping season in nearly 40
years. In November it forecast that sales at stores open at
least 14 months could fall 5 percent to 15 percent for the
remainder of fiscal 2009, which ends in February.
The retailer said it now expects 2009 profit of $2.50 a
share to $2.70 a share excluding items, with same-store sales
down 2 percent to 3 percent.
That compares with a lowered forecast of $2.30 to $2.90 a
share it gave in November, when Best Buy said the meltdown in
financial markets had spurred "seismic" changes in consumer
Analysts had expected profit of $2.59 a share for the year,
according to Reuters Estimates.
Best Buy said total sales for the month ended Jan. 3 rose 4
percent from a year earlier to $7.5 billion, in line with
Sales of home office products rose, buoyed by cell phones,
but sales of electronics declined as strength in advanced TVs
was offset by weakness in digital cameras and MP3 players.
The Minneapolis-based chain has expanded sales of mobile
phones and stepped up other product offerings to counter
increased competition from discounters such as Wal-Mart Stores
Anthony Chukumba, an analyst with FTN Midwest, said Best
Buy has likely gained market share at the expense of Circuit
City Stores Inc CCTYQ.PK, which filed for Chapter 11
bankruptcy protection in November and said on Friday that it
was in deal talks with two potential buyers.
Chukumba also said it was encouraging to hear that Best
Buy's sales trends had improved as the month progressed.
Nonetheless, Citigroup analyst Kate McShane reiterated her
"hold" rating on Best Buy shares.
"We think the sluggish macro environment both in the U.S.
and Europe and increased competition at retail will continue to
weigh on results in both the short and long term," McShane
wrote in a research note.
Best Buy said about 500 of its slightly less than 4,000
headquarters workers accepted voluntary exit packages it
offered last month in a bid to curb costs. But it added that
workers have until Jan. 16 to revoke their acceptance.
A charge of $60 million is expected to be taken in the
fourth quarter tied to the voluntary exit packages.
Best Buy plans to cut new-store openings in its next fiscal
year as capital spending falls about 50 percent.
Best Buy shares were down $1.58 at $28.07 in afternoon
trading on the New York Stock Exchange.
(Reporting by Karen Jacobs, additional reporting by Martinne
Geller in New York; editing by John Wallace and Gerald E.