Best Buy (NYSE:BBY) on Friday reported a same-store sales decline and flat revenue for December, yet still maintained its previous EPS guidance for the fiscal year.
The big-box electronics retailer, which was hammered in December on poor third-quarter earnings, reported $8.4 billion in revenues for the five-week period ended Dec. 31, 2011, which was level with the year-ago period. CEO Brian Dunn cited lower-than-expected customer traffic until the last week before Christmas. Best Buy also said same-store sales dropped 1.2% in the period.
However, Dunn insisted the company still would reach its fiscal earnings guidance of $3.35 to $3.65 per share, which would be in line with analysts’ average estimate of $3.40 per share.
Best Buy’s low sales are par for the course for the rest of the retail sector, which is reporting slightly better-than-expected sales. However, dogging Best Buy — and a potential worry for numerous other retail giants — is a cramp in margins. Stores offered blowout bargains throughout the holiday season, making a gamble on margins in hopes of bringing in high foot traffic.
The news had little immediate impact on BBY shares, which had gained almost 3% in early morning trading. Best Buy stock was trading just above $24, a three-week high, though shares had been valued around $28 before their post-earnings fall in December.