Posted at 8:38 AM on January 6, 2012
by Paul Tosto
Filed under: Economy
Lower-than-expected customer traffic in the last week before Christmas pushed Best Buy's December sales down from December 2010. But the company this morning said it still expects to be within earnings estimates for the fiscal year.
Overall revenue for the five weeks ended Dec. 31 came in at $8.4 billion, which was flat compared to the same time in 2010. Besides the flat revenue, Best Buy acknowledged a 1.2 percent decline compared to 2010 in stores open at least 14 months.
Best Buy shares were up slightly following the company's morning news release.
Here's the press release from Best Buy:
MINNEAPOLIS, Jan. 6, 2012 -- Best Buy Co., Inc. (NYSE: BBY), a leading multi-channel global retailer and developer of technology products and services, today reported revenue for the five weeks ended Dec. 31, 2011, of $8.4 billion, which was flat compared to the prior-year period and included a comparable store sales decline of 1.2 percent.
"We built off of share gains in the third quarter to deliver December sales that we believe compared favorably to the retail CE industry," said Brian J. Dunn, CEO of Best Buy. "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. The actions we have taken during the year to improve our performance online and in key connectable products such as tablets, eReaders and smart phones continued to deliver strong growth in December. I want to thank our employees for their significant dedication to serving our customers during this key holiday period."
The company's Domestic segment generated $6.5 billion in revenue for fiscal December, an increase of 0.4 percent when compared with the prior-year period. The Domestic segment's revenue performance was driven by the addition of new stores in the past 12 months, partially offset by a comparable store sales decline of 0.4 percent. Domestic segment areas of comparable store sales growth included tablets and mobile phones within the Computing & Mobile Phones revenue category, eReaders within the Consumer Electronics revenue category, and the Appliances revenue category. Tablets and eReaders each delivered low triple-digit comparable store sales gains during the month.
Mobile phones had a 20 percent comparable store sales increase during the month, driven by strong smart phone sales. These increases were more than offset by comparable store sales declines in other areas, including gaming within the Entertainment revenue category and digital imaging within the Consumer Electronics revenue category.
Gaming and digital imaging both experienced low double-digit declines in comparable store sales. The company noted that televisions experienced a mid single-digit comparable store sales decline within the Consumer Electronics revenue category. The company also noted that overall Domestic segment inventory levels finished fiscal December in line with its expectations.
The Domestic segment online channel delivered a 26 percent revenue increase compared to the prior-year period, driven by a strong traffic increase and momentum from share gains achieved in November.
The International segment's fiscal December revenue totaled $1.9 billion, a decrease of 1.7 percent versus the prior-year period. The revenue decline was driven primarily by a comparable store sales decline of 4.3 percent and unfavorable fluctuations in foreign currency exchange rates, partially offset by the addition of new stores in the past 12 months.
The International segment comparable store sales decline was driven by comparable store sales declines in our stores in Canada and Europe. Sales results for all countries in the International segment other than Canada are reported on a two-month lag.