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Best Buy's December Revenue Up
Jan 6, 2005
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Appliance and consumer electronics retailer Best Buy Co., Inc., reported that revenue for the fiscal month ended Jan. 1, 2005, increased 10 percent to U.S. $5.1 billion, compared with $4.6 billion for the fiscal month ended Jan. 3, 2004. The revenue increase was principally driven by the addition of 79 new stores in the past 12 months, the retailer said.

Best Buy also reported a comparable store sales gain of 2.5 percent for the 5-week period, due to increased sales of MP3 players, digital TVs, digital cameras, DVD movies, and notebook computers.

"Our stores' productivity has never been higher," said Brad Anderson, Best Buy vice chairman and CEO, referring to revenue per square foot. "While we noted a modest decline in customer traffic compared with that of December of last year, our average ticket increased, driven by continued consumer interest in digital products and the performance of our customer centricity stores. Our comparable store sales gain came on top of a 9.3-percent gain for the same period last year. Overall, we believe we gained market share…."

The company's 661 U.S. Best Buy stores reported revenue of $4.5 billion for fiscal December, an increase of 9 percent over the prior year. Best Buy's U.S. stores reported a comparable store sales gain of 2.6 percent for the fiscal month, reflecting solid in-store execution and the benefit of two extra shopping days prior to Christmas. Best Buy's 67-segmented stores, which opened in October as part of the company's customer centricity initiative, collectively maintained their relative sales out performance compared with the other U.S. Best Buy stores, which was expected.

"We were very pleased with our segmented stores' performance and continue to explore ways to apply what we are learning to other stores," Mr. Anderson said.

Magnolia Audio Video, a high-end retailer of consumer electronics with 22 stores, reported revenue of $20 million, which was a decrease of 6 percent, driven by a comparable store sales decline of 6.0 percent. The company's domestic segment, including both U.S. Best Buy stores and Magnolia Audio Video stores, had revenue of $4.5 billion, an increase of 9 percent, including a comparable store sales gain of 2.6 percent.

The company's 144 Canadian stores, including both Future Shop and Best Buy locations, contributed revenue of $610 million for the fiscal month, an increase of 23 percent compared with the prior year. Approximately two-fifths of the increase was due to favorable exchange rates, while the addition of new stores also had a significant impact, the retailer reported. The international segment had a comparable store sales gain of 1.4 percent for the period, reflecting solid holiday results, which were partially offset by the Sunday timing of the Boxing Day holiday.

Online traffic at the company's web sites also rose significantly for fiscal December.

The company's fiscal December results included a comparable store sales gain for MP3 players in the triple digits, and comparable store sales of digital televisions increased by the strong double digits. Fully-featured digital cameras also performed well. The retailer said consumer interest in portability and networking spurred comparable store sales growth for notebook computers in the mid teens, and comparable store sales gain in the high single digits for appliances reflected expanded assortments and higher levels of sales assistance in some areas of the country. As expected, offsetting these gains were comparable store sales declines in analog TVs, video gaming, home audio products, CDs, desktop computers, and cellular phones.

For the first 10 months of the fiscal year, the company reported a comparable store sales gain of 4.4 percent, including a gain of 4.5 percent at U.S. Best Buy stores; a gain of 3.5 percent for Magnolia Audio Video stores; and a gain of 3.7 percent for the international segment. Revenue for the first 10 months of the fiscal year was $23.3 billion, an increase of 12 percent, reflecting the addition of new stores as well as the comparable store sales gain.

Best Buy said it continues to expect fourth-quarter earnings of $1.56 to $1.66 per diluted share, compared with $1.42 per diluted share from continuing operations for the same period of fiscal 2004.

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