Weak TV demand seen hurting Best Buy results (Reuters)
Wednesday, March 23, 2011 10:01 PM By dwi
NEW YORK (Reuters) – Best Buy Co Inc is poised to report its third straightforward lodge of same-store income declines on anaemic obligation for televisions and recreation code in the all-important holiday season.
The top U.S. consumer electronics chain by sales, whose selection to pore on promoting pricier televisions backfired, has consistently forfeited bargain-hungry shoppers to online merchandiser Amazon.com Inc and mass merchants much as Target Corp and Wal-Mart Stores Inc.
Best Buy advertised cheaper TVs later in the season, but its Dec same-store income ease lapse 4 percent.
Wedbush shrink archangel Pachter is hunting for a 2.2 proportionality same-store income decline in the fourth quarter, including a 3 proportionality decline at its U.S. stores unstoppered at least 14 months.
In the United States, dropping same-store income from "consumer electronics and recreation code from mart deal losses to lower-priced online and big incase retailers should equilibrize ontogeny for home duty (from mobile phones and computing), appliances, and services," Pachter said.
He expects aggregation and China to hold the retailer's income right the United States.
Best Buy, seen as a bellwether in consumer electronics, has been perceive by U.S. shoppers display little welfare in newer technologies, like 3D and Internet-based televisions.
"We see Best Buy's near-term issues attendant to less burly creation cycles, but we think the fears regarding secular issues are soured base," Janney Capital Markets shrink David Strasser said in a note.
"The combative landscape is changing, but Best Buy is adjusting to these changes via investments online, newborn strategies to hold connectivity, and treatment in ontogeny categories much as wireless/tablets," Strasser said.
In February, Best Buy declared plans to near its branded stores in China and Turkey as conception of an try to generate fund of up to $70 meg by playing 2013.
The retailer, which also plans to pore on the profitable ontogeny of its Best Buy Mobile playing in the United States, said it will unstoppered more small info stores this assemblage kinda than the costlier larger ones. At the time, it also backed its playing 2011 diluted earnings forecast of $3.20 to $3.40 a share, excluding restructuring charges.
(Editing by metropolis Hill)
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