Digital products leading Best Buy sales higher.
biz.yahoo.com
Wednesday January 5, 12:33 pm Eastern Time
FOCUS-Best Buy raises outlook on strong holiday sales
CHICAGO, Jan 5 (Reuters) - Best Buy Co. Inc., the largest U.S. consumer electronics retailer, on Wednesday raised its outlook for fiscal fourth-quarter earnings after posting better-than-expected comparable-store sales for December, the key holiday season and the first month of the quarter.
In a conference call with analysts and media, Minneapolis-based Best Buy (NYSE:BBY - news) also said it anticipates it will top its year-over-year earnings growth goal of 25 percent in fiscal 2001, thanks to financial benefits it expects to receive from its recently announced alliance with software giant Microsoft Corp. Best Buy said it expects to finalize the deal with Microsoft in the near future, and will give additional fiscal 2001 earnings guidance at the end of the fourth quarter.
In the call, Best Buy said it is now comfortable raising fourth-quarter earnings per share guidance to 72 cents. After the third-quarter earnings release, analysts' consensus estimate was 68 cents, which has since risen to 69 cents, according to First Call/Thomson Financial, which tracks such data. Best Buy's fiscal fourth quarter runs through February.
For December, Best Buy said strong sales of digital products pushed its comparable-store sales, or sales at stores open more than a year, up 9.8 percent. The company said forecasts had centered on the mid-single digits.
Best Buy pointed out that in December, more than 10 percent of its sales were digital products, and that digital lines have higher gross margins.
Best Buy said that profits from its alliance with Microsoft should more than outweigh the expected cost of revamping its Web site in fiscal 2001. The alliance, announced in December, is a broad Internet and marketing deal.
Shares of Best Buy recovered from a slump early in the day to trade up 4/16 at 57-9/16 on the New York Stock Exchange. |
