Best Buy and Staples led a group of publicly held retailers of electronics and major appliances reporting strong sales for February. Best Buy cited strong sales of digital products, while Staples credited improved store-level execution for raising revenue.
Best Buy said sales soared 25% to a record $4.3 billion during its fiscal fourth quarter ended February 26, while full-year revenue was up 24% to an all-time high of $12.5 billion. Comparable store sales rose 11% for the quarter and 11.1% for the year.
CEO Dick Schulze attributed the increased popularity and lower cost of digital devices for the gains, lead by sales of DVD players, satellite systems, phones, cameras and camcorders. He added that "better in-stock levels and improved retail execution" also aided sales of large screen TVs, PCs and entertainment software.
"We believe consumer preference for our retail format has provided us with growing market share, which combined with the growth of digital products has improved our annual sales per store to more than $37 million," he said. CE made up 30% of Best Buy's product mix in 1999, up from 28% the prior year, while white goods stayed flat at 8% of sales. The chain has about 360 stores and plans to open 60 more this year. Earnings will be announced later this month.
Staples said net for its retail and delivery businesses grew 21% to $129.2 million during its fiscal fourth quarter ended January 29 - excluding a $9.1 million loss on its interest in Staples.com - while sales spiked 25% to $2.6 billion. Full-year earnings swelled 27% to $331.3 million on a 24% sales gain of $8.8 billion. Same-store sales were up 10% for the quarter and 9% for the year.
CEO Thomas Stemberg said the increases stemmed from basic blocking and tackling. "Execution does make a difference. Finding great store locations, effectively displaying merchandise and controlling inventory and distribution are keys to our success," he said.
Specifically, Staples entered new markets, increased its wireless offerings, introduced build-to-order PCs, bolstered its distribution operations, and added e-commerce kiosks to its entire stores.
Among merchants reporting February sales, Kmart CEO Floyd Hall said appliances and consumer electronics were among categories "showing particular strength" in February. The chain's total sales were up 4% to $2.4 billion for the four weeks ended February 23, and comparable stores showed a 2.7% increase. Hall said continued cooler weather in the South pushed comp store sales "slightly below plan."
Sears said sales for the four weeks ended February 26 grew 4.4% to $2 billion while same-store revenue rose 3.1% for the period. CEO Arthur Martinez said double-digit increases in sales of home appliances contributed to the gains.
Sharper Image said total sales surged 51% in February to $18.4 million. Store sales were up 37% to $12.3 million, aided by a 38% hike in same-store sales, while catalog sales grew 25% to $3.5 million and Internet sales spiked 522% to $2.7 million.
Musicland said gains in CDs, consumer electronics and DVDs spurred February sales up 2.5% to $134.8 million, while comparable stores edged up 1.7%.