The sky didn’t fall at Best Buy
Strength in the computing, mobile phone and appliance categories enabled Best Buy to report flat same store sales during the holidays and temporarily silence the voice of those who had prematurely written the company’s obituary.
Best Buy said sales for the nine week period end January 5, 2013 declined slightly to $12.8 billion from $12.9 billion during the nine week period ended December 31, 2011. Same store sales at U.S. stores during the period were flat, but may have benefitted from the five additional days after the first of the year as it allowed more time for gift card recipients to make purchases. Retailers’ record sales from gift cards after the cards are redeemed, not when the cards are sold.
Same store sales were strongest in the computing and mobile phone category which saw a 14% increase on top of a 13.7% gain during the comparable period the prior year, according to the company. Appliances were strong as well with same store sales up 10.7% on top of a prior year gain of 14.8%. Conversely, the weakest category was entertainment which saw a 17.8% same store sales decline on top of a prior year decline of 16.3%. The consumer electronics category declined 7% compared to a prior year decline of 3.5%.
The company also said its online business was strong, with sales up 10% to $1.1 billion thanks to increased traffic.
Best Buy CEO Hubert Joly, who joined the company only four months ago, viewed the results as an indication that a turnaround strategy called "Renew Blue" is working.
"One of the first priorities of our Renew Blue strategy is to stabilize and then begin improving our comparable store sales," Joly said. "During the most important period in the retail calendar – the holiday sales season – we were able to improve our domestic comparable store sales trends compared to the performance of the last several quarters and continue our strong traffic growth in our online business."