Best Buy U.S. holiday sales stabilize, shares jump

Fri Jan 11, 2013 1:17pm EST
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By Jessica Wohl

(Reuters) - Best Buy Co Inc (BBY.N: Quote) on Friday showed the first concrete signs of a turnaround in its U.S. stores, with flat same-store sales during the key holiday season, helped by sales of tablets and mobile phones and improvement in its online business.

The results surprised analysts, who had expected a decline, and Best Buy shares rose 11.9 percent to $13.66 in afternoon trading.

Best Buy, which is restructuring and faces a looming buyout proposal by founder and former chairman Richard Schulze, saw total revenue slip 0.4 percent to $12.8 billion in the nine weeks ended January 5. Sales at stores open at least 14 months declined 1.4 percent, versus a 0.4 percent decline in the 2011 holiday period.

The holiday was the first under new CEO Hubert Joly and the company has taken several steps to try to stabilize sales, including trying to improve its online business, matching competitors' online prices for some items during the 2012 holiday shopping season and giving additional training to workers at its stores.

U.S. online sales rose 10 percent to $1.1 billion.

Same-store sales were flat in the United States and fell 6.4 percent internationally on declines in Canada and China.

The flat U.S. same-store sales performance in the interim report was much better than decline of 2.5 percent expected by Janney analyst David Strasser, but he said that the international decline was steeper than the 4.5 percent decline he had anticipated.

Best Buy is expected to report full fourth-quarter results on February 28.   Continued...

A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012. Black Friday, the day following the Thanksgiving Day holiday, has traditionally been the busiest shopping day in the United States. REUTERS/Stephen Lam