Best Buy December Sales Fall

MINNEAPOLIS (AP) — Best Buy Co. says that weaker than expected traffic until the week before Christmas and low demand in Canada and Europe put a crimp in its December sales.

The largest U.S. electronics retailer said Friday that revenue in stores open at least two years fell 1.2 percent. The measure is considered a key gauge of a retailer’s financial health because it excludes stores that open or close during the year. That’s an improvement from a 4 percent drop in the same period last year.

Still, Best Buy reaffirmed its annual guidance. December is a crucial month for retailers since the holiday period can account for up to 40 percent of annual sales. Best Buy is opening smaller stores and beefing up its online presence as it faces tough competition from discounters and online retailers.

“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,” said CEO Brian Dunn.

Citi Investment research analyst Kate McShane said results likely improved during the second half of the month as “it appeared the company tried to be more competitive on price and shoppers delayed purchases until the last moment.”

Tablet computers, smart phones, appliances and e-readers were strong sellers. But TVs, digital cameras and video consoles and games were weaker.

Total revenue was flat at $8.4 billion. Online revenue rose 26 percent.

Domestically, revenue edged up less than 1 percent to $6.5 billion. But revenue fell nearly 2 percent to $1.9 billion. Revenue in stores open at least two years fell in Canada and Europe.

The company reaffirmed its annual adjusted profit guidance to $3.35 to $3.65 per share. Analysts expect $3.41 per share.

Shares rose 14 cents to $23.58 in premarket trading.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • common sense 101

    So they lay off their entire high paid IT department for cheaper offshore labor and they wonder why no one has money to buy the big ticket items? Who is running this company, Larry, Moe and Curly? Earth to Best Buy, every large coporation is doing the same thing, you better find a different business model because high paying jobs are no more unless you are an executive that is.

    • bob

      True that!

  • All-American

    110% agree!!!! Sales probably fell because they couldn’t ship half the stuff people ordered online and didn’t let them know till 1 week before Christmas!!!! Was probably an IT glitch I’m sure. Just like the Canadian Bacon and Green Pepper Pizza we received when calling the 800# for Dominos a few years back, call gets transferred to a call center overseas and we end up ordering thru INDIA for a pizza in Minnesota! What we REALLY ordered was a sausage pepperoni.. LOL something got lost in translation. I refuse to do business with companies that I know farm out labor overseas and take away US jobs. People if you care about this economy, you shoudl do the same and let them know why!

  • mr. obvious

    Best buy is over rated. 20 bucks for a sata cable. Microcenter sells them for 2 bucks.

  • Best Buy Lost Lost Already

    1/02/2012 @ 12:54AM |2,238,060 views
    Why Best Buy is Going out of Business…Gradually

    Good article
    I admit. I can’t do it. A few days ago, I visited a Best Buy store in Pinole, CA with a friend. He’s a devoted consumer electronics and media shopper, and wanted to buy the 3D blu ray of “How to Train Your Dragon,” which Best Buy sells exclusively. According to the company’s website, it’s backordered but available for pickup at the store we visited. The item wasn’t there, however, and the sales staff had no information.

    But my friend decided to buy some other blu-ray discs. Or at least he tried to, until we were “assisted” by a young, poorly groomed sales clerk from the TV department, who wandered over to interrogate us. What kind of TV do you have? Do you have a cable service, or a satellite service? Do you have a triple play service plan?

    He was clearly—and clumsily–trying to sell some alternative. (My guess is CinemaNow, Best Buy’s private label on-demand content service.) My friend politely but firmly told him he was not interested in switching his service from Comcast. I tried to change the subject by asking if there was a separate bin for 3D blu rays; he didn’t know.

    The used car style questions continued. “I have just one last question for you,” he finally said to my friend. “How much do you pay Comcast every month?”

    My friend is too polite. “How is that any of your business?” I asked him. “All right then,” he said, the fake smile unaffected, “You folks have a nice day.” He slinked back to his pit.

    As a sometime business school professor, I could just imagine the conversation with the TV department manager the day before. “Corporate says we have to work on what’s called up-selling and cross-selling,” the clerk was informed in lieu of actual training on either the products or effective sales. “Whenever you aren’t with a customer, you need to be roaming the floor pushing our deal with CinemaNow. At the end of the day, I want to know how many people you’ve approached.”

    But this is hardly customer service. It’s actually getting in the way of a customer who’s trying to self-service because there’s no one around who can answer a basic question about the store’s confusing layout. It’s anti-service.

    4 page article.

    • Josh

      that sounds like one of the Direct TV reps. in their stores not a Best Buy employee…which would make sense if you think about it.

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