New York - Consumers seemingly celebrated the quick conclusion of the war in Iraq by loosening their purse strings in stores.
At Best Buy, total sales for its fiscal first quarter ended May 31 grew 11 percent to $4.67 billion while same store sales edged up 2.2 percent. Broken out by chain, sales at Best Buy's 552 U.S. flagship stores grew 3 percent to $3.98 billion and comparable store sales gained 2.3 percent, while revenue at its 19 Magnolia Hi-Fi stores grew 31 percent to $30 million and comps slipped 0.4 percent. Canadian sales, comprised of 104 Future Shop and 10 Best Buy stores, grew 28 percent to $390 million against flat comps.
Fueling the growth was the addition of 69 new Best Buy, seven Future Shop and three Magnolia stores, plus strength in the digital TV, camera and camcorder categories. Gains also came from notebook computers, computer peripherals and enhanced mobile phones, while sales of desktop computers, audio products and major appliances continued to slide.
Vice chairman/CEO Brad Anderson said sales 'rebounded nicely in April and May' thanks to the quick conclusion of the Iraqi war, mounting consumer confidence and 'compelling' consumer offers like free shipping at BestBuy.com. He added that the company gained market share in several key categories during the quarter.
The sales results exclude the company's Musicland division, which has been written off as a discontinued operation and is up for sale. The unit, comprised of the Sam Goody, Suncoast and Media Play music chains, saw total sales fall 22 percent to $300 million and comparable store sales slip 15.6 percent.
Circuit City also reported sales for its first fiscal quarter ended May 31. Total revenue fell 9 percent to $1.93 billion and comp sales slid 10 percent, due in part to the war in Iraq, slightly lighter foot traffic and falling retail price points, the company said.
On the product front, digital imaging, big screen TV, entertainment software, laptops and computer printers put in a strong showing, while sales of home audio and camcorders lagged.
Chairman/president/CEO Alan McCollough reiterated that February's changeover to a non-commission sales force has had no adverse affect on customer service levels and has actually made it easier to shop Circuit City stores, while also reducing payroll costs. He added that about 191 more stores will be refixtured between now and the end of September, and that higher costs related to the company's finance operations will contribute to an earnings loss for the quarter of between 23 cents and 25 cents per share.
Sears continued its nearly two-year-long sales slump, although the declines were softer in May. The results, said chairman/CEO Alan Lacy, exceeded expectations, as total revenue fell 1.3 percent to $2.18 billion and comp sales slipped 1.9 percent. Within its full-line stores, sales of major appliances were up mid-single digits and CE sales were down by the high teens for the second consecutive month. Lacy said he was pleased with the strong majap showing, which helped drive total sales.
Among discount chains, Wal-Mart said May sales at its titular stores grew 9 percent to $12.85 billion and comps grew 2.1 percent, the latter due largely to increased foot traffic. Similarly, Target's flagship stores enjoyed a 9.2 percent hike in May sales, to $2.74 billion, and a comp gain of 1.4 percent.
Among warehouse clubs, Costco's May sales also grew 9 percent, to $3.2 billion, while domestic comps gained 2 percent. Video and white goods enjoyed small comp increases, the company said, although sales of computers, computer peripherals, audio, film cameras and pre-recorded movies declined. At Wal-Mart's Sam's Club, sales grew 6.3 percent last month to $2.6 billion and comps gained 1.8 percent, while BJ's revenue grew 10.3 percent to $497.2 million and comps gained 2.8 percent in May. BJ's cited CE, film, batteries and room air among its category laggards.
Elsewhere, OfficeMax provided a rare mid-quarter update by noting that comp sales for the five weeks ended June 4 were up over 9 percent thanks to gains in the frequency and average size of customer transactions.
Finally, Sharper Image said total sales grew 28 percent to $45 million in May and comp store sales increased 19 percent, owing to an effective multimedia advertising effort highlighting the company's proprietary products.