Best Buy Co. (NYSE: BBY) is the 800-pound gorilla of electronics retailers with a market capitalization of nearly $20 billion and a stellar record of revenue and earnings growth – but today its CEO admitted that it is not immune to a weak economy.

Brad Anderson, Best Buy's CEO and Vice Charmian, said in a statement that, “Soft domestic customer traffic in January, coupled with our near-term outlook, now indicate that our fourth-quarter revenue will fall short of our planned targets.”

The effect of lower fourth-quarter revenue projected into this year means that Best Buy is expecting 2008 earnings of only about $3.05 per share compared to previous guidance of $3.10-$3.20 per share.

Given an undeniably weak economy led by a dangerous housing market situation, lower guidance and weaker sales are no surprise, but Best Buy's response certainly is: the company plans on continuing to expand its U.S. retail space by 10% this year. There is certainly logic to this contrarian move in the spirit of Warren Buffett's advice “Be greedy when others are scared,” and Best Buy thinks it can leverage its strong brand and recently updated store format into new customers and sales even in a poor economy by cannibalizing business from competitors like Circuit City Stores Inc. (NYSE: CC). But, though Best Buy is certainly in a better position than Circuit City, taking sales from rivals only works to buoy growth if the total number of sales in the sector don't shrink too much – if the sales pie gets small enough it doesn't matter how many pieces you get, growth is still in trouble.

More than counting on a superior business, Best Buy executives have said they remain “upbeat about the long-term outlook,” but is this optimism justified? Interim Chief Financial Officer of the company, Jim Muehlbauer, admits that “The macroeconomic environment grew more challenging after the holidays [leading to] our post-holding results [not being] what we originally expected.” What should confuse investors is what makes CEO Anderson or CFO Muehlbauer think the “macroeconomic environment” is going to turnaround any time soon. As a commentator for the WSJ noted, foreclosed homes don't need home theaters with $2,000 flat-screen TVs.

A discussion of the company's prospects wouldn't be complete without mentioning the 800-pound gorilla of all retailers – Wal-Mart Stores Inc. (NYSE: WMT). Wal-Mart continues to expand its electronic offerings while stealing market share from specialty retailers across all sectors. With Best Buy under assault from not only the U.S. economy but the biggest corporate driver of the economy, now might not be the time to be greedy.

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