Best Buy cuts annual profit, sales forecasts on tepid holiday demand

(Reuters) -Best Buy cut its annual profit and sales forecasts on Tuesday, in a sign that the holiday shopping season would be marked by aggressive discounts and tepid demand for pricey electronics such as televisions and home theater systems.

Shares of the company fell 7% in premarket trade. They have gained 18.8% so far this year through Monday close.

Despite easing inflation pressures, consumers have remained mindful of spending on big-ticket electronics, and have waited instead to shop during deals and promotional events.

Retailers such as Best Buy (NYSE:), as well as big-box stores operator Target (NYSE:), have struggled as a result to revive sales in the non-essentials category, and have had to rely heavily on discounts.

Best Buy now expects annual comparable sales to decline between 2.5% and 3.5%, compared with its earlier forecast of a decline between 1.5% and 3%.

The U.S. electronics retailer projected annual adjusted profit per share of $6.10 to $6.25, compared with earlier target of $6.10 to $6.35.