Best Buy Q4 Comps Up 2.8%

"We saw several reasons for optimism in the fourth quarter," said Darren Jackson, CFO and EVP-finance. "Our total market share improved to about 17%, and we remain optimistic that we can drive more customer traffic in the coming year, thanks to improvements in our business. From the product side, we anticipate continued growth in digital TVs, MP3 players, notebook computers and services, which will be partially offset by declines in our analog businesses."

U.S. Best Buy stores reported a fourth-quarter comp-store sales gain of 3.1% over the previous year, while the company's international stores—comprised of Future Shop and Best Buy stores in Canada—had a more modest comp-store sales gain of 0.5%. Magnolia Audio Video stores, a Best Buy brand that sells high-end products at stores in California, Oregon and Washington state, posted comp-store sales gain for the quarter of 1.8%.

"The company has several strengths," Sheila McNeely, a Chicago-based director at Fitch Ratings, tells GSR. "Primarily, it has a strong balance sheet, and good cash flow."

Besides its current financial condition, McNeely also points to Best Buy as a leader in bringing new consumer electronics to a wider mass of buyers. "That's something the company is very good at, and its momentum in that area should continue," she says. "Not every consumer has fully embraced digital consumer electronics yet, but they will. Best Buy excels at selling that kind of product, and making consumers comfortable with it."

In its fourth quarter, Best Buy opened 11 stores and closed two Magnolia Audio Video stores. The new stores included nine U.S. Best Buy stores and two Best Buys in Canada. All together, the company currently operates 668 U.S. Best Buy stores, 20 Magnolia Audio Video stores, 114 Future Shop stores and 30 Canadian Best Buy stores.