Best Buy same-store sales drop less than feared

Friday, January 7th, 2011 | Finance News

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DETROIT (Reuters) – Top U.S. consumer electronics chain Best Buy Co's (BBY.N) December same-store sales fell, but not as sharply as some analysts had feared after a previously reported drop in market share.

The retailer, which also stood by its 2011 profit outlook, said on Friday that sales at stores open at least 14 months fell 4 percent as it lost bargain-hungry shoppers to rivals that offered bigger discounts. That was better than the consensus forecast for a 6 percent decline and led the shares to rise about 1 percent in premarket trading.

"I take this as a positive data point," said Fifth Third Asset Management portfolio manager Ted Moore, whose firm owns the stock. "They've had some disappointment recently, and this is a step toward rebuilding investor confidence."

Many mainstream retailers reported weaker-than-expected December sales on Thursday, showing that shoppers remain frugal.

Consumer electronics retailing is competitive. Industry sales rose only 1.5 percent in December, largely because of lower price tags on televisions, according to MasterCard Advisors SpendingPulse.

In Best Buy's domestic segment, sales were down 5 percent, matching the decline seen in the third quarter, while they slipped 0.1 percent internationally. Moore said the overall Street estimate suggested analysts were expecting a decline of about 7 percent domestically.

Overall sales in the month slipped 1.6 percent to $8.4 billion.

Best Buy's shares rose 1.2 percent to $35.69 in trading before the market opened.

(Reporting by Ben Klayman in Detroit; Editing by Derek Caney)

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