Best Buy has had its outlook dropped to "negative" by rating agency Fitch Ratings. The move came due to the CE retail giant's reporting of dropping same-store sales last week.
The rating was moved to "negative" from its previous status of "stable."
"The change in outlook reflects the recent sharp decline in comparable store sales and the expectation that same store sales could remain significantly pressured through calendar 2009," Fitch said as part of its announcement. "As a result, operating results are expected to weaken." Fitch also said it expects competition to remain strong, due to expanded electronics offerings at discount competitors.
But it wasn't all bad news for Best Buy; Fitch kept its Issuer Default Rating, bank credit facility and senior unsecured notes at the "BBB+" rating. "Best Buy continues to benefit from its leading market position in the consumer electronics sector and its successful customer-driven operating strategy which has allowed it to gain market share," the agency added. "Fitch expects the company will remain prudent in its financial management, and does not expect Best Buy to repurchase any shares in fiscal 2009.
