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Best Buy Rises despite Weak Sales

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Shares of Best Buy Co. (NYSE: BBY)Best Buy Co are up as much as 2% in morning trade after the company reported weak December sales. The company cited weaker than expected traffic during the week before Christmas and low demand in Canada and Europe as primary reasons for the lower than expected sales figures.

The largest U.S. electronics retailer said revenue in stores open at least two years fell 1.2 percent in December. Total revenue was little changed at $8.4 billion. Online revenue rose 26 percent. Sales at stores open at least 14 months fell 0.4 percent in the U.S., while they slipped 4.3 percent globally on weakness in Canada and Europe.

Chief Executive Officer Brian Dunn said that the December results were lower than the company’s expectations, with customer traffic trailing Best Buy’s projections until the week before Christmas.


Analysts however were satisfied with the company’s performance saying that the company was able to gain market share in the key holiday season. Analyst Anthony Chukumba at BB&T Capital Markets said” It does appear that Best Buy, at least from a brick-and-mortar perspective, picked up market share in December,” Chukumba said, pointing to weak performance in the consumer electronics sector by Costco Wholesale (NASDAQ: COST) and Target Corp (NYSE: TGT).”It is good enough from my perspective,” Chukumba said. “I am just happy they are going to make (profit numbers for) the quarter.”

Television sales dropped because of “softer demand and average-selling-price pressure due to intense competition,” David Strasser, an analyst at Janney Montgomery Scott LLC in New York, wrote in a note to clients Jan. 3. He recommends buying Best Buy shares and had estimated same-store sales would decline 1 percent. Strasser said Best Buy’s appliance business gained share from the likes of Sears Holdings (NASDAQ: SHLD).

Additionally Best Buy reaffirmed its outlook for the current financial year. The company said it hopes to achieve earnings of $3.35-$3.65 a share for the fiscal year.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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