Last Update: 11-Jan-13 07:24 ET
Best Buy shares rise 2% following holiday sales
Best Buy (BBY $12.22 +0.29) reported Holiday (9 weeks ending Jan 5) comps -1.4% YoY; Domestic comps flat YoY with international comps -6.4%. Total rev fell 0.4% to $12.8 billion; domestic online sales grew 10% to $1.1 bln on higher traffic. Domestic comparable store sales for the period were flat. The co recorded positive comparable store sales growth in mobile phones, tablets/eReaders and appliances. In contrast, comparable store sales in entertainment, televisions and computing declined. The International segment comparable store sales decline of 6.4 percent was driven by comparable store sales declines in Canada and China. Sales results for all countries in the International segment other than Canada are reported on a one-month lag. Driven by solid performance in the holiday period, comparable store sales, gross margin, earnings and inventory levels continue to be in line with the assumptions that supported the co's fiscal year 2013 free cash flow guidance provided on Nov 20, 2012 that was in the range of $850 million to $1.05 billion. Accounts payable as a percentage of inventories, however, which was assumed to be consistent with prior year, is now expected to be lower than prior year due to 1) the earlier than expected receipt, and therefore payment of, inventory purchases and 2) a shift in sales mix to higher velocity merchandise categories that carry shorter payment terms (note: overall vendor payment terms were consistent with prior year). As a result, the co now expects free cash flow for fiscal year 2013 to be ~$500 million. As consistent with previous guidance, this free cash flow estimate excludes the impact of previously announced restructuring activities and change in restricted cash related to working capital. "One of the first priorities of our Renew Blue strategy is to stabilize and then begin improving our comparable store sales. During the most important period in the retail calendar -- the holiday sales season -- we were able to improve our Domestic comparable store sales trends compared to the performance of the last several quarters and continue our strong traffic growth in our online business."
Best Buy (BBY $12.22 +0.29) reported Holiday (9 weeks ending Jan 5) comps -1.4% YoY; Domestic comps flat YoY with international comps -6.4%. Total