Best Buy: 'Most difficult climate we've ever seen'

Retailers under pressure

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NEW YORK (CNNMoney.com) -- Best Buy, the No. 1 electronics retailer, cut its full-year profit forecast Wednesday, citing continued weakness in consumer spending that it says has been exacerbated by the "recent turmoil in the financial markets."

The company also said "uncertainty regarding future consumer spending" would limit its ability to project revenue for the critical holiday shopping season.

That's a huge problem since the November-December holiday shopping months typically account for 50% or more of retailers' annual profits and sales.

"In 42 years of retailing, we've never seen such difficult times for the consumer," Brian Dunn, president and chief operating officer of Best Buy, said in a statement. "People are making dramatic changes in how much they spend, and we're not immune from those forces."

The Minneapolis-based retailer now expects earnings for the year to be between $2.30 and $2.90 a share on sales of between $43.7 billion and $45.5 billion. It said same-store sales for the period could decline between 1% to 8%.

The company previously had forecast full-year earnings of between $3.25 to $3.40 based on a same-store sales increase of 2 to 3 percent for the year.

Same-store sales, an important metric of a retailer's performance, measure sales at retail stores open at least a year.

"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," Brad Anderson, chief executive officer of Best Buy, said in a statement. "Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year."

Best Buy said a stronger U.S. dollar would also pressure its revenue and profit from its international operations.

Analysts, on average, had expected Best Buy (BBY, Fortune 500) to log full-year profit of $3.03 a share, according to Thomson Reuters.

Shares of Best Buy fell 13% in pre-market trading.

The retailer's announcement comes two days after rival Circuit City filed for bankruptcy protection.