Best Buy Co. Inc. the top U.S. electronics retailer, Wednesday said fourth-quarter earnings would miss Wall Street estimates and rival Circuit City Stores Inc. reported a wider than expected quarterly loss, in the latest signs of a disappointing holiday shopping season.
Minneapolis-based Best Buy reported a higher third-quarter profit, but said early winter storms in the Northeast cut into sales for the fourth quarter.
"Primarily as a result of inclement weather in the Northeast, quarter-to-date revenue trends are modestly below our expectations," Darren Jackson, chief financial officer, said in a statement.
For the third-quarter ended Nov. 29, Best Buy said it earned $122 million, or 37 cents a share, up from $86 million, or 27 cents a share, a year ago.
Including a loss on discontinued operations of $27 million, Best Buy in the year-ago third quarter had net earnings of $59 million, or 18 cents a share.
Best Buy said it expects a fourth-quarter profit ranging from $1.34 to $1.39 a share. Analysts had expected, on average, a profit of $1.41 a share, up from a year-ago profit of $1.10 a share.
Jackson said Best Buy still expected sales from stores open at least 14 months, or same-store sales, to increase by 6 percent to 8 percent for the fourth quarter, bringing total quarterly revenue to about $8.3 billion.
At Best Buy, third-quarter sales increased 18 percent to $6.03 billion, while same-store sales rose 8,6 percent.
Although Best Buy has been winning market share from struggling rival Circuit City , both chains face growing competition from industry newcomers such as computer makers Gateway Inc. and Dell Inc. .
Moreover, discount chains like Wal-Mart Stores Inc. are aggressively cutting prices on such popular merchandise as digital cameras, camcorders, DVD players and home theater systems to lure shoppers this holiday season.
Circuit City Stores said its third-quarter loss narrowed from a year-ago, but higher advertising expenses and weak sales weighed on overall results. The company has stepped up advertising during the busiest shopping seasons.
The Richmond, Virginia-based retailer reported a loss for the third quarter ended Nov. 30 of $24.1 million, or 12 cents a share, compared with a loss of $26.1 million, or 13 cents a share, a year ago. Analysts had expected, on average, a loss of 7 cents a share, according to Reuters Research, a unit of Reuters Group Plc.
Including results from Circuit City's credit card business, which it sold to FleetBoston Financial on Nov. 18 and presented as discontinued operations, the company had net earnings of $1.5 million, or 1 cent a share, compared to a net loss of $17.8 million, or 9 cents a share, a year earlier.
This year's third-quarter included $9.8 million of costs related to the relocation of some stores, including accelerated depreciation of assets related to planned future relocations, Circuit City said.
Circuit City said sales fell by 1 percent to $2.41 billion. Same-store sales also declined by 1 percent.