Best Buy (NYSE:BBY) delivered a better than expected fiscal third quarter as consumer electronics and home office sales gained on a same store basis.
The large retailer, a good barometer of consumer tech spending, reported third quarter earnings of $227 million, or 53 cents a share, on revenue of $12.02 billion, up 5 percent from a year ago. Same store sales were up 1.7 percent for the quarter ending Nov. 28. In same quarter a year ago, Best Buy was whacked by a slowdown in consumer demand and rapidly paring inventory.
In the U.S., Best Buy saw same store sales rise 4.6 percent in the third quarter. Revenue totaled $8.9 billion, up 9 percent from a year ago. Best Buy said it saw higher average ticket sales and better traffic in its stores. Notebook PCs, flat panel TVs, mobile phones and appliances were selling while gaming, movies and music sales continued to fall (statement).
However, Best Buy’s international business struggled with revenue of $3.1 billion, down 6 percent from a year ago.
What’s most notable about Best Buy’s quarter is the breakdown by category:
That chart indicates that consumer electronics sales are rebounding and we’re all spending on home office gear. Home office sales for Best Buy have continued to gain throughout the recession as laid off workers venture out on their own and buy equipment.
As for the outlook, Best Buy said it is continuing to gain market share and sees “stabilization of store traffic,” but noted that consumers are still cost conscious. The fourth quarter will also feature lower gross margins for notebook PCs and televisions. For 2010, Best Buy is projecting non-GAAP earnings of $3 a share to $3.15 a share. GAAP earnings will be $2.94 a share to $3.09 a share. Revenue will check in about $49 billion to $49.5 billion.
Wall Street was expecting earnings of $2.96 a share on revenue of $48.6 billion.