Best Buy Dec. comp doesn't damper CES mood
LAS VEGAS - Reporting from the Consumer Electronics Show, Best Buy said that revenue for the fiscal month of December ended Jan. 1, decreased 1.6% to $8.4 billion. The revenue decline for the five-week period, as compared with $8.5 billion in revenue for the five-week period ended Jan. 2, 2010, was due primarily to a comparable-store sales decline of 4% partially offset by the addition of new stores in the past 12 months and the favorable impact of fluctuations in foreign currency exchange rates.
“December sales results were within our expected range of outcomes for the month, and I’d like to thank our employees for making a difference in providing outstanding customer experiences this holiday season,” said Brian Dunn, CEO of Best Buy.
The company said its domestic segment generated $6.5 billion in revenue for fiscal December, a decrease of 3.2% when compared with the same period last year. The domestic segment’s revenue performance included a comparable-store sales decline of 5% and gains from new stores in the past 12 months.
According to the company, sales were soft in gaming, music and movies as well as televisions and mobile phones, while e-readers and smarphones continued to show strength. Showing particular strength was the appliances category, which boasted a 10.9% comparable-store sales increase.
Internationally, Best Buy reported December revenue of $1.9 billion, an increase of 4.5% versus the prior-year period. The revenue gain was driven primarily by favorable fluctuations in foreign currency exchange rates and the addition of new stores in the past 12 months, partially offset by a comparable-store sales decline of 0.1% in fiscal December, according to the company.
Despite reporting weak results for December, Best Buy did manage to beat expectations. Analysts at Stifel Nicolaus, for example, were expecting a far more dismal 6% decline in domestic same-store sales and 1% decline internationally.
Bernstein Research also felt optimistic about the company's performance saying, "Although Best Buy's December results were still weak in absolute terms, they showed some sequential improvement versus November trends and were moderately better than muted expectations. Looking forward, BBY should enjoy some relief from easier comparisons after the company approaches Q1. We expect [the company's] report to have a modestly positive effect on the stock, driven by the improved comp performance and reiteration of FY11 EPS guidance."
Based on fiscal December sales results and expectations for the balance of the year, Best Buy said it continues to anticipate that diluted earnings per share results for the fiscal year will fall within the previously announced guidance range of $3.20 to $3.40.