Dec. Sales Mixed For CE Chains
By Alan Wolf and Bob Gerson -- TWICE, 1/21/2002
LAS VEGAS — While the consumer electronics industry was meeting this month at International CES, five major chains reported their December sales, which were mixed.
Santa rewarded Best Buy and Circuit City with double-digit sales gains in December, while RadioShack and Good Guys both reported losses for the month. Sales results were mixed for Tweeter Home Entertainment Group, whose net soared 55.4 percent for the quarter while comps slipped 1.6 percent.
Best Buy reported December retail sales jumped 43 percent from the same year-earlier month to $3.86 billion, paced by an 18 percent climb to $3.16 billion.
On a same-store basis, total sales were up 6.2 percent for the month and 1.8 percent on the year. Sales at Best Buy stores that were open at least 14 months were up 6.2 percent for the month and 1.8 percent on the year; Musicland revenue rose 3.8 percent in December but was down 0.6 percent for all of 2001; and Canada-based Future Shop had comparable store increases of 16.6 percent and 17.9 percent for those periods.
"December sales exceeded our expectations for all of the businesses, reflecting both the strength of new products and outstanding execution across the organization," said president Brad Anderson. "Based on these results, we are expecting our earnings for the fiscal fourth quarter to exceed 50 percent, exceeding our earlier guidance."
Best Buy's forecast for 2002 earnings, said chairman Richard Schulze, would be driven by an anticipated 17 percent to 20 percent overall sales growth and single-digit improvements in same-store volume.
Meanwhile, fueled by strength in expanded post-appliance categories like video games, digital cameras and DVD and PC software, Circuit City's net volume rose 10 percent to $1.83 billion, matched by a 10 percent hike in comp store sales.
President/CEO Alan McCollough attributed the glad tidings to the majap successor categories, positive PC comps, strong holiday marketing and an "appropriately promotional" pricing stance.
Looking ahead, McCollough predicted upper single-digit comp store gains for its fiscal fourth quarter and consensus-beating earnings of as high as 71 cents per Circuit City Group share.
By contrast, RadioShack's total and same-store sales both fell 2 percent in December. Chairman/CEO Len Roberts said net sales of $689.8 million were impacted by a 50 percent decline in PC volume, although the losses were tempered by a 10 percent to 12 percent rise in parts, batteries and accessories; a 14-percent gain in wireless and a 30 percent spike in video accessories.
The story was more somber for Good Guys, whose December net was down 9 percent to $131.6 million, while comp store sales slid 10 percent. Chairman/CEO Ken Weller blamed the downturn on the weak U.S. economy and eight underperforming stores that will be closed over the next two months. On the plus side, he said that "sales improved throughout the month, demand for digital products remains strong and our focus on newer, more fully featured higher-end products continued to provide a solid gross profit margin."
Despite a 55.4-percent spike in net sales for the fiscal fourth quarter ended Dec. 31, 2001, to $252 million, Tweeter president/ CEO Jeff Stone was only "moderately pleased" with his chain's performance given its 1.6 percent comp store slide, which excludes the Sound Advice, Audio Video Systems and Big Screen City acquisitions. Those stores suffered same store sales declines of 3.9 percent, 20 percent and 7.3 percent, respectively, for the quarter.
Stone said sales were fueled by digital products, which represented over 52 percent of dollar volume for the period.
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