By Dhanya Skariachan
NEW YORK (Reuters) - Best Buy Co Inc gave a fiscal-year profit outlook that could miss Wall Street estimates as budget-conscious U.S. shoppers show little interest in buying big-ticket items like televisions, and its shares fell more than 5 percent.
The largest U.S. consumer electronics chain, which posted its third straight quarter of same-store sales declines on Thursday, also forecast a fall in same-store sales in the current quarter.
The lackluster outlook led many analysts to question if Best Buy's strategy to focus on smartphones and other mobile broadband gadgets will be enough to combat weak demand for TVs, and boost sales over the long term.
Best Buy, seen as a bellwether in consumer electronics, has been hurt by U.S. shoppers showing little interest in newer technologies such as 3-D and Internet-based televisions. The company is concerned about demand going forward too.
"We are fully aware that consumers are still relatively constrained, and some of our major categories are coming off challenging years," CEO Brian Dunn said on a call. "We are still assuming that some of these headwinds will continue."
U.S. consumer sentiment fell to its lowest level in five months in early March as gasoline prices rose, a survey showed.
Best Buy announced plans last month to open about 150 Best Buy Mobile small-format stores in the United States as it looked to counter the impact of the slumping television business with a big focus on the profitable mobile business.
But that has not allayed concerns about its long-term prospects.
"It is very difficult for Best Buy to post positive comps when a category that is 20 percent of their sales is coming down double digits," BB&T Capital Markets analyst Anthony Chukumba said.
For fiscal 2012, the company sees earnings of $3.30 to $3.55 a share, excluding previously announced restructuring charges and potential share repurchases. The outlook compared with the average analyst estimate of $3.56, according to Thomson Reuters I/B/E/S. It expects same-store sales of flat to a 3 percent decline.
Best Buy said it sees same-store sales performance in the first half, especially in the first quarter, to be similar to the fourth quarter.
Best Buy shares fell 5.4 percent to close at $30.13 Thursday on the New York Stock Exchange.
WILL JAPAN HURT?
Best Buy said it was not aware of any significant impact to its business as a result of the earthquake in Japan, a hub of electronic device makers.
"We are in contact with our vendor partners and suppliers, but recognize that it is still too early for them to assess what impact, if any, this may have on our business in fiscal 2012," Best Buy's CFO Jim Muehlbauer said.
However, Marc Pado, U.S. market strategist, Cantor Fitzgerald & Co, said there was some concern about popular crowd-pulling items like Apple Inc's iPad 2 being delayed due to the natural disaster in Japan.
"If there are disruptions and shortages then people aren't going to go into the store," he said.
Net income fell to $651 million, or $1.62 a share in the fourth quarter that ended February 26, from $779 million, or $1.82 a share, a year earlier. Excluding items, it earned $1.98 a share, well ahead of the analysts' average estimate of $1.85 a share, according to Thomson Reuters I/B/E/S.
On Thursday, GameStop Corp, the world's largest retailer of video-game products, also posted a higher-than-expected quarterly profit.
Best Buy has consistently lost bargain-hungry shoppers to online retailer Amazon.com Inc and mass merchants Target Corp and Wal-Mart Stores Inc.
"Best Buy should see some near-term relief from the concerns circling the name," Stifel Nicolaus analyst David Schick said. "The problems re-emerge, though, as the longer-term view is taken."
Best Buy's decision to focus on promoting more expensive televisions backfired in the early part of the holiday season. The retailer advertised cheaper TVs later in the season, but its December same-store sales still fell 4 percent.
Sales fell to $16.3 billion, in line with expectations.
Same-store sales fell 4.6 percent in its fourth quarter, including a 5.5 percent decline at its U.S. stores open at least 14 months.
Wedbush analyst Michael Pachter was looking for a 2.2 percent same-store sales decline in the quarter, including a 3 percent decline at its U.S. stores open at least 14 months. (Reporting by Dhanya Skariachan; Additional reporting by Edward Krudy; Editing by Dave Zimmerman and Gunna Dickson)