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Best Buy Holiday Sales Slump, 2012 Outlook Reaffirmed

Best Buy Holiday Sales Slump, 2012 Outlook Reaffirmed
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Consumer electronics retailer Best Buy Co., Inc. (BBY: Quote) reported Friday that revenues for the month of December remained flat with last year, while comparable store sales declined 1.2 percent.

The company's domestic revenues edged up, while international revenues declined, with comps for the month in both domestic and international stores dropping. The company also reaffirmed its earnings outlook for the full-year 2012.

"We built off of share gains in the third quarter to deliver December sales that we believe compared favorably to the retail CE industry," CEO Brian Dunn said in a statement.

The company noted that the actions taken during the year to improve its performance online and in key connectable products such as tablets, eReaders and smart phones continued to deliver strong growth in December.

The Richfield, Minnesota-based retailer, which is also known as the 'big blue box' because of the prominent design on Best Buy stores, reported revenues of $8.4 billion for the month of December, flat with last year. Total comparable store sales declined of 1.2 percent.

The company's comparable store sales is comprised of revenue from stores operating for at least 14 full months as well as revenue related to call centers, Web sites and other comparable sales channels.

Revenue from the domestic segment reached $6.5 billion in December, up 0.4 percent from the same month last year, boosted by the gains from the addition of new stores, partially offset by comparable store sales decline of 0.4 percent.

Best Buy said the domestic segment's results reflected growth in Best Buy Mobile and appliances, partially offset by the softness in entertainment software and televisions. Online sales were up 26 percent.

Primarily, the entertainment software category's comparable store sales declined 19.5 percent, while appliances category saw a 14.3 percent growth in comparable store sales, and the computing and mobile phones category reported a 13.4 percent rise in comparable store sales.

The International segment's monthly revenue reached $1.9 billion, down 1.7 percent from the same month last year, hurt by a comparable store sales decline of 4.3 percent and unfavorable fluctuations in foreign currency exchange rates, partially offset by the gains from the addition of new stores.

Comparable store sales decline was attributable to the softness at the stores in Canada and Europe.

"Based on our performance in December we continue to expect to achieve our annual guidance, despite customer traffic that was lower than expected until the last week before Christmas, which resulted in December revenue that was slightly lower than our expectations," Dunn added.

Looking ahead to fiscal 2012, the company reaffirmed its adjusted earnings guidance in the range $3.35 to $3.65 per share. On average, 26 analysts polled by Thomson Reuters expect the company to report earnings of $3.14 per share for the full-year 2012. Analysts' estimates typically exclude special items.

In Friday's regular trading session, BBY is currently trading at $24.05, up $0.61 or 2.60% on a volume of 1.73 million shares. In the past 52-week period, the stock has been trading in a range of $21.79 to $36.13.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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