RICHFIELD, Minn. ― Best Buy Co. appeared to gain market share from rivals in the United States during the key holiday season and stood by its profit outlook for the financial year despite a 1.2 percent same-store sales decline in December.
The news boosted Best Buy shares nearly 3 percent and also allayed some concerns that all its holiday sales were driven by profit-sapping discounts.
The world’s largest consumer electronics chain said on Friday that sales at stores open at least 14 months fell 0.4 percent at its U.S. unit, while they slipped 4.3 percent internationally on weakness in Canada and Europe.
“Given competitor comments and supplier input, these are relatively impressive results,” Credit Suisse analyst Gary Balter said, adding that “the reconfirmation of… guidance by management should put to bed the worries of massive margin deterioration to drive those sales.”
While the international same-store sales number missed most analyst expectations, many such as David Strasser at Janney Capital Markets and Anthony Chukumba at BB&T Capital Markets said they were happy with Best Buy’s domestic performance, especially since they believe the chain gained market share in the United States during the key selling season.
“It does appear that Best Buy, at least from a brick-and-mortar perspective, picked up market share in December,” Chukumba said, pointing to weak performance in the consumer electronics sector by Costco Wholesale (COST.O) and Target Corp (TGT.N). Best Buy shares were up 2.9 percent at $24.12 Friday morning on the New York Stock Exchange.
“It is good enough from my perspective,” Chukumba said. “I am just happy they are going to make (profit numbers for) the quarter.”
Unlike the 2010 holiday season when Best Buy held the line on discounts and promoted only pricey goods, this time around it offered deep discounts on items ranging from flat-screen TVs to digital cameras.