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(Updates share price in fifth paragraph.)
Jan. 6 (Bloomberg) -- Best Buy Co. posted a same-store sales drop in December that was in line with analysts’ estimates and repeated its forecast for profit this year as it fought off challenges from Amazon.com Inc. and Wal-Mart Stores Inc.
Sales at stores open at least 14 months fell 1.2 percent in December, the Richfield, Minnesota-based company said today in a statement. Total revenue in the month was $8.4 billion, about the same as last year, the company said.
Chief Executive Officer Brian Dunn stepped up holiday discounts to keep customers from going to Amazon and Wal-Mart. Best Buy increased its share of the U.S. television market and improved its showing online, with Web sales gaining 26 percent, said David Strasser, an analyst at Janney Montgomery Scott LLC.
“After being hit hard through 2011, this provides some sense of stability and a reality check that they are not share donors, as is so widely anticipated,” Strasser, who’s based in New York, wrote today in a note to clients. He recommends buying Best Buy shares and had estimated same-store sales would decline 1 percent.
Best Buy, the world’s largest consumer-electronics retailer, rose 3.3 percent to $24.22 at 4 p.m. in New York. The shares tumbled 32 percent in 2011, the third annual decline in four years.
Last month’s comparable-store sales “were largely in line with overall expectations,” Colin McGranahan, an analyst at Sanford C. Bernstein & Co. in New York, wrote today in a note to clients. He rates Best Buy “market-perform.”
Dunn said that the December results were lower than the company’s expectations, with customer traffic trailing Best Buy’s projections until the week before Christmas.
The company reiterated its forecast that profit this year would be $3.35 a share to $3.65 a share. The average of 26 analysts’ estimates compiled by Bloomberg was $3.40.
--Editors: Robin Ajello, James Callan
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