Best Buy December revenue down 1.6% compared to 2009; online sales up 13%
Best Buy's domestic e-commerce sales were up 13% year-over-year during the company's December fiscal period, which ended January 1. Revenue decreased 1.6% compared with the same period of 2009, according to the retailer's financial report.
Domestic e-commerce, mobile phones, appliances and services were the bright spots in fiscal December. The appliances category saw a 10.9% increase, year-over-year, during the month. Growth in the home office and services categories were more modest, with 4.3% and 7.6% increases, respectively, year-over-year.
Even the company's e-commerce growth was bittersweet, however. According to a MasterCard SpendingPulse report, December 2010 e-commerce sales increased 17.6% on average compared to the previous December, positioning Best Buy approximately 5% below industry average.
The company also reported a 4.3% decline in store sales and a 3.2% drop in domestic segment revenue compared to the prior fiscal December.
The retail giant partly blamed “softness in entertainment software and televisions” and “continued softness in music and movies.” It also said lack of revenue driven by the gaming industry was to blame for the poor month. Overall, store sales for the entertainment software category declined 15.4% compared to the same period of last year.
“This may have been a bad year, but they appear to have things in the pipeline that may help in the future,” said Sucharita Mulpuru, VP and principal analyst at Forrester Research. “I'm surprised that mobile phones and tablets didn't help them more, but those are still growing parts of their business…I'm sure as Internet protocol TVs heat up in the future, they'll regain some share.”
The data was released about three weeks after Best Buy CEO Brian Dunn reported poorer-than-expected third-quarter earnings. He said on a December 14 conference call that “our sales in the US…were lower than we expected for the quarter, and as a result earnings were less than we anticipated.”
However, on the same call, Dunn accurately predicated Best Buy Mobile would be “big for us this holiday season.” He also noted that the gaming sector had “lagged our expectations.”
A Best Buy representative could not be reached for comment.