Best Buy grabs market share; Earnings better than expected
Best Buy on Tuesday reported first quarter earnings that were better than expected as the retailer continued to grab market share amid the demise of Circuit City. However, same store sales fell 6.2 percent and most categories excluding home office equipment declined, and May sales were weak.
The leading electronics retailer reported income of $153 million, or 36 cents a share, on revenue of $10.09 billion, up 12 percent from a year ago (statement). Excluding restructuring charges, Best Buy would have reported earnings of 42 cents a share. Wall Street was expecting earnings of 34 cents a share. In the same quarter a year ago, Best Buy reported earnings of $179 million, or 43 cents a share.
Brian Dunn, Best Buy's president and operating chief and CEO as of June 24, said the company tightly managed costs and grabbed 200 basis points of market share. As for sales, Best Buy said that retail traffic was less volatile in the quarter, but fell off in May amid a tough comparison with a year ago when consumers got government stimulus checks.
By category, Best Buy said that notebook computers, flat-panel TVs, cameras and mobile phones helped it gain share. The home office category held up best in the quarter. Best Buy has also been dabbling with other product lines such as electric bikes and motorcycles.
As for the outlook, Best Buy maintained its outlook for fiscal 2010. The company is projecting annual earnings of $2.50 to $2.90 a share.