Electronics retailer Best Buy Co. Inc. (NYSE: BBY) announced this morning that total sales for the nine weeks of the 2012 holiday season declined 0.4% while same-store sales fell by 1.4%. U.S. same-store sales were flat to the 2011 holiday season, but international sales fell 6.4% year over year.
The company’s newly hired CEO tried to put a good face on the report:
During the most important period in the retail calendar — the holiday sales season — we were able to improve our Domestic comparable store sales trends compared to the performance of the last several quarters and continue our strong traffic growth in our online business. Our holiday selling strategy, backed by a compelling assortment, increased employee training and price match policy, allowed us to deliver these results.
So, domestic sales “trends” are better, but sales are still weak. The dip in international sales was attributed to declining sales in Canada and China.
Best Buy said that free cash flow guidance of $850 million to $1.05 billion, first issued in November, remains accurate, but that changes in timing of payments to suppliers will lower the actual amount of free cash flow to $500 million.
Investors have bid the shares up more than 6% in premarket trading this morning, to $12.80 in a 52-week range of $11.20 to $27.95. What can they be thinking? They must be trying to convince Richard Schulze that the company is worth buying.