Best Buy Holiday Sales Rise But Lowers Outlook

Best Buy

Best Buy Holiday Sales Rise But Lowers Outlook



Best Buy said Thursday that sales during the key holiday season rose 2.6%, as consumers were more willing to spend on products including new big-screen TVs and smartphones.
Large-screen TVs and smartphones were “the primary drivers of our year-over-year revenue growth, more than offsetting significant weakness in tablets,” said Best Buy president and CEO Hubert Joly in a statement.

However, shares of Best Buy fell nearly 8% in early trading Thursday on concerns about 2015 sales. The electronics retailer warned that falling prices and expected slow demand for consumer electronics could lead to flat or single-digit declines for the first half of the year.

Shares had risen nearly 5% this week — from $38.04 to $39.91, after Goldman Sachs upgraded its stock from “neutral” to “buy.

The electronics retailer reported overall domestic revenue of $10.1 billion for the nine weeks that ended Jan. 3, 2015, an increase of 4% over $9.7 billion in the 2013 holiday shopping season. Last year, Best Buy saw an 0.8% decline in holiday sales, in part due to a shorter than usual shopping season that was marked by cold weather nationwide.

“In the holiday period, we delivered $11.4 billion in Enterprise revenue, reflecting a 2.6% domestic comparable sales increase, excluding the 80-basis point estimated benefit of installment billing,” said Best Buy president and CEO Hubert Joly in a statement. “A compelling merchandise assortment, strong multi-channel execution, and a more favorable year-over-year macroeconomic environment drove these better-than-expected results.”

Last holiday season, the electronics retailer’s sales were down 0.8% for the nine weeks ended Jan. 4 at stores, websites and call centers open for at least 14 full months. Despite the drop, it was an improvement over the 1.7% decline in the same period a year earlier.

Best Buy’s report is the first from major retailers to offer insight into holiday sales performance. A report from the National Retail Federation on Wednesday raised questions about the strength of consumer spending, which has shown recent favorable signs.

While holiday sales increased 4% over November and December — the best holiday sales season since 2011 — the federation found that for the month of December, sales fell 1.6% at electronics stores, 0.3% at clothing retailers and 0.9% at general merchandise stores.

Also last week, USA TODAY reported on exclusive data from payments technology firm First Data that said holiday sales increased 3.2%. First Data only analyzed same-store sales, a metric that includes stores open at least a year.


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