The Wall Street Journal-20080112-Earnings Digest- Best Buy Sales Slow- Weighing on Shares
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Electronics retailer Best Buy Co. posted slower growth in same-store sales for December, and its shares fell 5.1%.
Results were still better than those at rival Circuit City Stores Inc., which said Monday that same-store sales fell 11% in December.
Best Buy's sales at stores, Web sites and call centers open at least 14 months, or same-store sales, rose 1.5% world-wide amid little growth in the U.S., where same-store sales rose a mere 0.3% in the five-week period ended Jan. 5. Internationally, same-store sales rose 7.6%.
Sales of consumer electronics, which account for 46% of Best Buy sales, fell by 3.1%. The Minneapolis retailer said declines in digital-music players, projection and tube televisions overshadowed gains in flat-panel TVs and GPS gadgets.
Meanwhile, same-store sales of entertainment software, which includes videogames, rose 8.2%. The category makes up 25% of Best Buy's total revenue.
Thanksgiving fell early in 2007, skewing sales comparisons with December 2006, which had one more week of post-Thanksgiving sales than the recent reporting period. The company estimated a same-store sales gain of 3% overall and 2.1% in the U.S. when adjusting for the shift.
Best Buy calculates comparable-store sales based on stores, including relocated ones, and Web sites that have been operating for at least 14 months, as well as remodeled and expanded locations. The figures exclude foreign-currency fluctuations.
Best Buy's total sales for the period climbed 11% to $7.3 billion.
Electronics retailers such as Best Buy and Circuit City don't usually report monthly sales, but they do so for December because of the month's outsized impact on the fiscal fourth quarter.
Circuit City said its sales drop for the month was led by desktop computers, DVD hardware, mobile products and home audio.
Best Buy reiterated last month's increased fiscal-year profit target of $3.10 to $3.20 a share. Best Buy is due to release its fiscal- fourth-quarter results April 2.
Shares of Best Buy were down $2.37, or 5.1%, to $44.20 in 4 p.m. New York Stock Exchange composite trading.
