Best Buy Adds Market Share; Profit Falls

**akhilles** · 06-17-2009 04:26 AM

By THE ASSOCIATED PRESS
Published: June 16, 2009

Chris Rank/Bloomberg News

Dee Byers, right, a Best Buy customer, with Steve Buckner, an employee at an Atlanta store on Monday. Despite the collapse of the retailer’s top rival, weak demand hurt profit.

RICHFIELD, Minn. (AP) — The Best Buy Company, the consumer electronics retailer, said on Tuesday that its first-quarter profit fell 15 percent even as its biggest competitor exited the market.

The quarter’s results compare with a year-ago period when the government’s stimulus checks put extra cash in the hands of consumers. But Best Buy, the nation’s biggest electronics retailer, still beat earnings estimates.

Best Buy noted increases in the sales of laptops and cellphones, as well as a rise in repairs. Sales fell for digital cameras, appliances, video games and movies.

Profit was $153 million, or 36 cents a share, in the quarter ended May 30. That compares with $179 million, or 43 cents a share, a year earlier.

Adjusted profit was 42 cents a share. Analysts surveyed by Thomson Reuters expected 34 cents a share.

Revenue rose 12 percent, to $10.1 billion, as it opened 185 stores and gained some market share from the closed Circuit City Stores. The company said it gained 2 percentage points of market share in the quarter and that its gains accelerated after the March 8 closing of Circuit City outlets across the country.

But clearly Best Buy is facing increasing pressure from Wal-Mart Stores, the world’s largest retailer. Wal-Mart is aggressively expanding into higher-end TV and electronics with names like Sony and Dell to woo those orphan customers.

Best Buy’s sales at stores open at least a year fell 6 percent, and the stronger dollar hurt overseas results.

Best Buy, however, is hoping that its service will help differentiate it from discount retailers like Wal-Mart.

http://www.nytimes.com/2009/06/17/te...1&ref=business