Brisk business on Black Friday, spurred by steep early bird discounts, was insufficient to pull retailers out of the sales doldrums last month.
Dealers attributed the disappointing results to sluggish consumer spending and a late Thanksgiving, which cut the holiday selling season by nearly a week.
Among merchants reporting November and third quarter sales was Best Buy, whose total revenue was up 16 percent to $5.5 billion for the three months ended Nov. 30. But minus the addition of 68 new stores, the first-time inclusion of Future Shop's third quarter results, and despite record Thanksgiving weekend revenues, total comp sales for the company slipped 0.3 percent for the period, just below Best Buy's guidance of no change. The late Thanksgiving shaved about 1.5 percentage points off its quarterly comps, the retailer said.
Broken out by channel, sales at Best Buy stores grew 12 percent to $4.7 billion and comps grew 0.7 percent on the strength of digital and large-screen TVs, DVD players, digital cameras and online commerce, the company said. Those areas offset weakness in desktop computers, major appliances and pre-recorded music.
The latter was felt more acutely at Best Buy's Musicland group, whose revenue fell 11 percent to $370 million while same store sales dropped 10.7 percent.
Showing increases were Magnolia Hi-Fi, with single-digit comp store gains, and Canada-based Future Shop, whose same store sales grew 3.8 percent.
Executive VP and chief financial officer Darren Jackson noted that operating margins "held up well" despite the promotional environment.
At Circuit City, total sales rose 7 percent to $2.4 billion for the third quarter ended Nov. 30. Comp sales increased 6 percent over the 4 percent decline reported for the same period last year.
Chairman, president and CEO Alan McCollough said that Circuit City's record one-day sales volume, generated on Black Friday, helped push November comps into the black, on top of a 6 percent year-ago gain. He attributed the positive quarterly comps to improvements in sales training, marketing, and merchandising selection and presentation, but also acknowledged that "pricing was promotional across a broad range of products."
Sales drivers for the quarter included big-screen and portable TVs, entertainment software, entry-level DVD players, digital imaging products and mobile audio, while laggards included wireless communications and DBS, McCollough said.
Things were more solemn at Sears, where total sales fell 8.7 percent in November to $2.6 billion while comps sank 10.9 percent. "Sales were in line with our expectations for the month," said chairman and CEO Alan Lacy.
Among the discount chains, Wal-Mart said sales at its stores rose 10.5 percent to nearly $13.7 billion in November while comps grew 2.8 percent — the low end of its projections — against a gain of 4.5 percent last year. It cited CE among its strongest categories. By contrast, Target Corp.'s flagship stores suffered a 5.7 percent drop in same store sales last month, while total revenue grew 3.2 percent to $3.3 billion.
Among the wholesale clubs, Costco said November net grew 7 percent to $3.2 billion and comps rose 2 percent, while Wal-Mart's Sam's Club division saw sales rise 7 percent last month to $2.7 billion and comps grow 1.3 percent. BJ's reported a 12 percent spike in sales for the month to $500 million as comps gained 0.5 percent, buoyed in part by brisk sales of video games.
Specialty retailer Sharper Image, whose proprietary products are now also being sold by Circuit City, reported a 33 percent gain in November net to $56.8 million and a 15 percent hike in comp store sales, owing to its strategy of offering exclusive products across a broad price spectrum, said founder, chairman and CEO Richard Thalheimer.