Best Buy Co.'s holiday sales in the U.S. grew 4.1% on sharply
higher online sales, but the retailer warned that its earnings
would begin to feel pressure starting next quarter as it boosts
spending to fuel growth.
Shares of Best Buy fell 5.8% in premarket trading.
Best Buy has invested in its Web operations amid concerns that
its stores were becoming little more than a testing ground for
products that are ultimately bought online. The company has spruced
up the look of its website, attracted more customer reviews, added
a clearance section and improved its search-engine rankings.
In the nine weeks leading up to Jan. 3, comparable online sales
in the U.S. grew 13.4% compared to a year earlier.
Best Buy's sales excluding newly opened or closed stores
increased 2.6% in the U.S during the holiday period. Demand for TVs
and mobile phones was offset by weakness in tablets.
As for the current year, Best Buy said industry changes--such as
deflationary pricing, weak demand and declining purchases of
extended warranties--are pressuring the company. In response, the
company plans investments in growth initiatives that will pressure
first-quarter results.
During the holidays, comparable sales of consumer electronics
increased 11.1% in the U.S., while appliances sales jumped 9.9%.
International sales, excluding newly opened or closed stores, fell
3.6% on a 13.4% decrease in entertainment sales.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires