Best Buy same-store sales down in fiscal Q1

PHYSICAL: Chain gained market share from Circuit City closure

By Danny King -- Video Business, 6/16/2009

JUNE 16 | PHYSICAL: Best Buy's fiscal earnings fell 15% in the fiscal first quarter as the company took a restructuring charge, while same-store sales of consumer electronics products declined.

Net income for the quarter ended May 30 decreased to $153 million, or 36¢ a share, from $179 million, or 43¢, a year earlier, as sales increased 12% to $10.1 billion, Best Buy said in a statement today. Excluding charges related to U.S. store improvements and corporate restructuring overseas, earnings were little changed.

Same-store sales declines offset market-share gains from the closure of smaller competitor Circuit City in March. As Best Buy boosted its U.S. market share of home-theater products by 2.5% and increased sales in products such as mobile phones, the company had more than a 10% drop in same-store sales of videogaming products, while same-store flat-screen television revenue was little changed, company executives said on a conference call with analysts today.

U.S. consumer-electronics same-store sales fell 7.6%, compared with a 4.9% drop in overall U.S. comparable-store sales.

"The [consumer electronics] industry is weaker than we expected, so the comparisons are more difficult," said Best Buy president Brian Dunn, who succeeds CEO Brad Anderson this week. Dunn added that last year's economic stimulus checks from the U.S. government boosted year-earlier consumer-electronics sales.

Best Buy's gaming sales decline was consistent with an industry whose April sales stalled from a lack of new titles. Through the first four months of the year, videogame industry sales dropped 4% from year-earlier record high revenue, to $5.28 billion, with sales in April alone down 17%, NPD Group reported last month.

Best Buy was expected to earn 34¢ a share on $10.1 billion in sales, the average analyst estimate in a Thomson Reuters survey.