Best Buy (BBY) Lives to Fight Another Day
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(Updated - January 11, 2013 11:37 AM EST)
Today struggling retailer Best Buy (NYSE: BBY) released a highly anticipated and critical reported on 2012 holiday sales. This year the stakes were sky high and so was the competition. For the first time, Best Buy offered in-store and online price matching with Amazon (Nasdaq: AMZN), Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Heading into the holidays, many believed a Best Buy sales-flub would botch a rumored buyout offer by founder and former Chairman Richard Schultze.
The Results
Best Buy Co announced revenue of $12.8 billion for the nine weeks ended January 5, 2013 compared to $12.9 billion for the nine weeks ended December 31, 2011, essential flat. Holiday comps fell 1.4 percent.
Domestic comparable store sales for the period were flat.The company recorded positive comparable store sales growth in mobile phones, tablets/eReaders and appliances. In contrast, comparable store sales in entertainment, televisions and computing declined.
The International segment comparable store sales decline of 6.4 percent was driven by comparable store sales declines in Canada and China.
Overall the results were slightly ahead of many Wall Street estimates. For example, analysts at Goldman Sachs were forecasting a 3 percent decline in domestic same-store-sales in 4Q. The consensus was for a decline of 2.5 percent over the holiday period.
Commenting on the news, Goldman analyst Matthew J. Fassler said, "This is the clearest beat delivered by BBY in some time, though without visibility on earnings, we would hesitate to draw big-picture conclusions."
Best Buy President and CEO Hubert Joly told investors to expect a lot of ups and downs on the journey back to success. Overall, today's results appear to be neither. They are, for lack of a better word, okay.
None the less, many investors today appear to be throwing caution to the wind. Shares are higher by 11.5 percent to 13.6 intra-day on Friday. The massive rally could indicate much lower expectations than previously thought.
Today struggling retailer Best Buy (NYSE: BBY) released a highly anticipated and critical reported on 2012 holiday sales. This year the stakes were sky high and so was the competition. For the first time, Best Buy offered in-store and online price matching with Amazon (Nasdaq: AMZN), Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Heading into the holidays, many believed a Best Buy sales-flub would botch a rumored buyout offer by founder and former Chairman Richard Schultze.
The Results
Best Buy Co announced revenue of $12.8 billion for the nine weeks ended January 5, 2013 compared to $12.9 billion for the nine weeks ended December 31, 2011, essential flat. Holiday comps fell 1.4 percent.
Domestic comparable store sales for the period were flat.The company recorded positive comparable store sales growth in mobile phones, tablets/eReaders and appliances. In contrast, comparable store sales in entertainment, televisions and computing declined.
The International segment comparable store sales decline of 6.4 percent was driven by comparable store sales declines in Canada and China.
Overall the results were slightly ahead of many Wall Street estimates. For example, analysts at Goldman Sachs were forecasting a 3 percent decline in domestic same-store-sales in 4Q. The consensus was for a decline of 2.5 percent over the holiday period.
Commenting on the news, Goldman analyst Matthew J. Fassler said, "This is the clearest beat delivered by BBY in some time, though without visibility on earnings, we would hesitate to draw big-picture conclusions."
Best Buy President and CEO Hubert Joly told investors to expect a lot of ups and downs on the journey back to success. Overall, today's results appear to be neither. They are, for lack of a better word, okay.
None the less, many investors today appear to be throwing caution to the wind. Shares are higher by 11.5 percent to 13.6 intra-day on Friday. The massive rally could indicate much lower expectations than previously thought.
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