Best Buy stock jumps on positive holiday numbers
BY MAE ANDERSON & MICHELLE CHAPMAN THE Associated Press
Saturday, January 12, 2013
1/12/13 at 4:03 AM
NEW YORK - Shares of Best Buy Co. soared 16 percent Friday after the electronics chain showed signs of starting to reverse declining sales during the critical holiday selling season, a better-than-expected result.
The stock rose $2 to finish at $14.21 on the New York Stock Exchange. But that's still close to the low end of its 52-week trading range of $11.20 to $27.95. The low for 2012 occurred Dec. 27.
Richfield, Minn.-based Best Buy has been facing tough competition from discounters and online retailers, as people browse electronics in stores and then go home to buy them more cheaply online, a practice known as "showrooming." To combat this, it has instituted a cost-cutting program, invested in more employee training and put an online price-matching policy in place during the key holiday period of November and December. The holiday quarter accounted for about a third of Best Buy's revenue last year.
The chain said that revenue at stores open at least a year fell 1.4 percent for the nine weeks ended Jan. 5. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
The company's U.S. performance was flat. While this was slightly below the 0.3 percent increase Best Buy reported a year ago, President and CEO Hubert Joly said in a statement that it was better than the past several quarters.
Best Buy tapped Joly in August to help reverse its slide. Joly has made management changes, including hiring CFO Sharon McCollam in November, and embarked on a turnaround plan.
Morningstar analyst R.J. Hottovy said the results show that some of Best Buy's initiatives, such as increased employee training and online price matching, helped boost sales.
"Sales are incrementally positive, but Best Buy still faces an uphill battle with regard to its turnaround," he said.
Original Print Headline: Best Buy shares jump after holiday numbers