Best Buy had a great Q3, propelled by strong sales of fat-margin games consoles, notebook PCs, flat screen TVs and GPS thingymajigs. An extra week of holiday shopping for the quarter ended December 1 did it no harm, either.
Earnings were $228m (Q3 2006: $150m) on revenues up 17 per cent to $9.93bn (Q3 2006: $8.47bn). The electronics retailer attributed 2.5 per cent of the sales growth to a calendar shift that moved the end of Q3 from last year's November 27 to this year's Dec 1. But this will have a knock-on effect in Q4, which loses a week's holiday madness for its sales period.
Accordingly, Wall Street marked down the company's shares almost four per cent in early trading today.
With the world+dog anticipating weak US consumer spending next year, Best Buy should suffer from any downturn. But today's results show that it is beating up its major competitors, Circuit City and the soon-to-be defunct CompUSA. The company is acclerating growth plans, aiming to open 150 new stories in the current year, 15 more than it had previously planned. Presumably, it is poring over CompUSA's store portfolio right now. ®