Best Buy US results bright spot over holidays
MINNEAPOLIS (AP) -- Struggling consumer electronics chain Best Buy said Friday that a key revenue metric declined during the critical holiday season. But its flat performance in the U.S. was better than the past several quarters, and online revenue showed strong growth.
Shares of Best Buy climbed more than 2 percent in premarket trading.
Sales for November-December can comprise up to 40 percent of a retailer's annual revenue, making it the most crucial period on the calendar.
Best Buy Co. has been implementing a turnaround plan aimed at improving results as it faces tough competition from discounters and online retailers.
The chain said that revenue at stores open at least a year fell 1.4 percent for the nine weeks ended Jan. 5. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
The company's U.S. performance was flat. While this was a hair below the 0.3 percent increase Best Buy reported in the prior-year period, President and CEO Hubert Joly said in a statement that it was an improvement over the past several quarters.
Best Buy tapped Joly in August to help reverse its slide. Joly has made management changes, including hiring CFO Sharon McCollam in November, and outlined a plan to improve results that includes beefing up customer service and revamping stores while cutting overhead and supply-chain costs.
Best Buy said that sales were strongest among cell phones, tablets, electronic readers and appliances, while sales of entertainment, televisions and computer-related items dropped.
Another encouraging sign was that online revenue rose 10 percent for the holiday period, bolstered by better traffic. This is notable because there's been ongoing concern that people browse electronics in Best Buy's stores and then go home to buy them more cheaply online, a practice known as "showrooming." The increase in online revenue over the holidays shows that the chain is managing to grab its share of online buyers as well.
"While it will be a journey with ups and downs, we are focused on becoming an increasingly effective multi-channel retailer and engaging with the tens of millions of consumers who shop us online and in-store," Joly added.
Revenue at stores open at least a year declined 6.4 percent internationally, stung by softness in China and Canada.
Total revenue for the holiday period fell slightly to $12.8 billion from $12.9 billion.
Best Buy lost CEO Brian Dunn in April, after an investigation showed he had an inappropriate relationship with a female staffer.
That led to the departure of co-founder Richard Schulze, who knew about the relationship but didn't report it properly, the investigation found.
Schulze stepped down, but he has been considering making a bid for the company. That bid had not materialized by the end of 2012, although Best Buy has given Schulze more time to look over its books before he makes an offer.
Best Buy's stock added 59 cents, or 4.8 percent to $12.80 about 90 minutes before the market opens.