Retailing on the Rise?
On March 4, Best Buy Company, Inc. noted a 21% increase in revenue for the fourth fiscal quarter, ended February 28. The Minneapolis-based electronics retailer, the largest in North America, reported revenue from continuing operations at $8.44 billion for the fiscal 2004 fourth quarter, compared to revenue of $6.99 billion for the fiscal 2003 fourth quarter, ended March 1, 2003. Sales at comparable stores were up 9.7% for the quarter.
The large increase in revenue was due in part to the addition of 78 new stores over the past year, the report noted. December was an especially strong month for Best Buy, with revenue up 9.3%. The trend continued through the remainder of the quarter, according to the company's vice chairman and CEO Brad Anderson, who attributed the growth to "effective advertising and promotional campaigns" and "redemption of gift cards and 'Reward Zone' certificates" that brought customers back into the stores after the holiday season.
Sales gains in the company's US stores were up 9.9% for the quarter. Strong product categories included notebook and desktop computers, digital cameras and digital televisions. Best Buy's Magnolia Audio Video, a West Coast high-end chain of 22 stores, reported fourth-quarter comparable store sales were up 3.4%. Best Buy's Canadian operations—including namesake stores and Future Shop stores—posted comparable store sales gain of 7.9% for the fiscal fourth quarter.
The company's total revenue for the 2004 fiscal year reached $24.54 billion, a 17% increase over the $20.95 billion reported for fiscal 2003. Comparable store sales were up 7.1% for the fiscal year. Best Buy operates 608 stores under its own name in the US and 19 in Canada. It also operates 108 Future Shop stores in Canada.
The Best Buy report follows one issued in February by Canton, MA–based Tweeter Group, one of the nation's largest electronics retailers. Tweeter reported a 2% rise in revenue for its first fiscal quarter, ended December 31, with a total of $255.2 million, compared to $249.7 million for the same period the previous year. Net income was off slightly:$5.1 million vs $5.2 million, as was operating income at $8.7 million vs $9 million.
"We fared well compared to the industry," said CEO Jeffrey Stone. Strong product niches for Tweeter were flat-panel televisions, both LCD and plasma, and DLP rear-projection TVs. Flat panels alone accounted for 19% of the company's revenue during the quarter, and DLP units accounted for an additional 8%. The company's custom installation business "enjoyed double-digit growth," Stone told reporters.