Buoyed by brisk Black Friday sales and easy year-ago comparisons, retailers largely posted solid revenue gains for the third quarter and November.
At Best Buy, total revenue for the third quarter ended Nov. 29 grew 18 percent to $6 billion, and comparable store sales — which are now calculated to reflect the impact of non-point-of-sale transactions including delivery revenue, mail-in rebates and loyalty program costs — rose 8.6 percent. That is exclusive of relocated stores and the discontinued Musicland division. The comp figure includes e-commerce sales and remodeled and expanded stores in operation for at least 14 full months.
Broken out by unit, sales at Best Buy's flagship stores grew 14.7 percent to $5.39 billion. Magnolia Audio Video revenue rose 31 percent to $40 million and comps grew 4 percent. The Canadian operations, comprised of Future Shop and Best Buy stores, saw sales grow 42 percent to $600 million for the quarter. And BestBuy.com enjoyed "significant" revenue improvement, the company said.
Best Buy attributed its domestic net sales gains to the addition of 54 U.S. Best Buy stores and three Magnolia units in the past 12 months, and said higher customer traffic was the primary driver of the comp sales gains. CEO Brad Anderson also credited employees' "customer focus" for the higher comps, and said the company continues to gain market share in notebooks, LCD and plasma TV, and digital cameras and camcorders.
Indeed, digital cameras, digital camcorders and satellite systems showed "strong" double-digit comp store gains, the company said, while video and home office was up in the low double digits. The latter was led by continued growth in notebooks, high single-digit gains in desktops, and double-digit hikes in networking and MP3 devices.
Major appliances showed a "slight" comp sales gain, the company said, owing to promotions, special orders and a greater mix of higher-end products. By contrast, audio comps declined by the mid-single digits.
At Circuit City, comps and net sales slipped 1 percent for the three months ended Nov. 30, with total revenue reaching $2.4 billion. In a statement, CEO Alan McCollough focused on the company's 4 percent hike in November comps, which reflected a record-breaking Black Friday that yielded the company's highest ever one-day sales volume.
McCollough attributed the strong November results to store improvements and the decision to be "more promotional on selected items, particularly over Thanksgiving weekend." The former include improved product adjacencies and new product displays that can be found in 222 revamped stores, four fully-remodeled stores and seven new and 10 relocated stores which were completed during the current fiscal year. The company also reported "strong growth" in online sales.
On the product front, sales leaders included movie and music software, DTV, LCD and plasma displays, satellite systems, digital imaging and portable digital audio.
McCollough noted that the company is anticipating a stronger holiday selling season this year over last.
Among other CE specialists reporting results, Harvey Electronics, the New York metro area A/V chain, said net sales for its 2003 fiscal year ended Nov. 1 were $42.4 million, a gain of 2.7 percent over the prior year. Comp sales edged up less than 1 percent for the period.
The results include the addition of an extra week in the first fiscal quarter, and a change in the way extended warranty sales are recorded that reduced sales and cost of sales by $571,000 in the fourth fiscal quarter. For that period, net and comp sales were $9.2 million, representing a gain of about 3 percent.
Harvey president Franklin Karp called the results "very gratifying," compared with declines reported by other specialty CE chains.
Within the mass merchant channel, Sears said net sales for November slid 3.2 percent to $2.5 billion and comps fell 3.6 percent for the four weeks ended Nov. 29. "Overall, November results were below expectations and we are disappointed that the results weren't stronger," said CEO Alan Lacy. He noted that despite positive consumer response to holiday gift offerings, including digital CE, "overall spending at the beginning of the season has been more subdued than expected," compelling the company to be more promotional than it had planned.
Comp sales of CE declined by the high single digits, while majap comps climbed by the low single digits, the company said.
Among the discount chains, November sales at Wal-Mart's flagship stores rose 10.8 percent to $14.8 billion and comps grew 3.7 percent for the four weeks ended Nov. 28. Net sales at Target's flagship stores rose 14.1 percent to $3.8 billion and comps gained 7.4 percent for the four weeks ended Nov. 30, led by sales of home entertainment products.
Within the wholesale club channel, Costco said November net sales grew 17 percent to $3.8 billion and companywide comps rose 14 percent. Sam's Club saw November net sales grow 7.4 percent to $2.8 billion and comps rise 4.7 percent. And at BJ's November net rose 12.9 percent to $564.7 million and comps grew 8.4 percent.
Leading the charge at Costco were computers, A/V and majaps, which together saw comp gains in the "very high teens — a very strong showing," said investor relations head Bob Nelson. By contrast, BJ's cited CE as one of its weaker categories for the month.
Lastly, specialty retailer Sharper Image said total November sales increased 22 percent to $69.2 million while comps grew 8 percent. "Consumers appear to be in good spirits and have responded enthusiastically to new products," said CEO/founder Richard Thalheimer.