Best Buy's December Revenue Rises 10% to $5.1 Billion; Comparable Store Sales Increase 2.5% as Sales of MP3 Players, Digital TVs and Digital Cameras Surge

Business Wire, Jan 6, 2005

The company's fiscal December results included a comparable store sales gain for MP3 players in the triple digits as consumers continued to opt for portable audio entertainment. Comparable store sales of digital televisions increased by the strong double digits, reflecting consumer interest as well as improved supply. Fully-featured digital cameras also performed well. A comparable store sales gain in the low double digits for DVD movies was driven by seasonally strong holiday performance. Consumer interest in portability and networking spurred comparable store sales growth for notebook computers in the mid teens. The comparable store sales gain in the high single digits for appliances reflected expanded assortments and higher levels of sales assistance in some areas of the country. As expected, offsetting these gains were comparable store sales declines in analog TVs, video gaming, home audio products, CDs, desktop computers and cellular phones.

Year-to-Date Revenue Summary - Fiscal 2005
                      (U.S. dollars in billions)
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                                                     Comparable Store
                         Revenue      Revenue Gain    Sales Gain(1)
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Continuing Operations      $23.3              12%              4.4%
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  Domestic                 $20.9              11%              4.5%
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  International             $2.4              22%(2)           3.7%
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Note: All periods presented reflect the classification of Musicland's
financial results as discontinued operations.

   (1) Comprised of revenue at stores and Web sites operating for at
least 14 full months, as well as remodeled and expanded locations.
Relocated stores are excluded from the comparable store sales
calculation until at least 14 full months after reopening. The
calculation of the comparable store sales gain excludes the effect of
fluctuations in foreign currency exchange rates.

   (2) The effect of fluctuations in foreign currency exchange rates
accounted for approximately one-third of the international segment's
revenue gain for the first 10 months of fiscal 2005.

For the first 10 months of the fiscal year, the company reported a comparable store sales gain of 4.4 percent, including a gain of 4.5 percent at U.S. Best Buy stores; a gain of 3.5 percent for Magnolia Audio Video stores; and a gain of 3.7 percent for the international segment. Revenue for the first 10 months of the fiscal year was $23.3 billion, an increase of 12 percent, reflecting the addition of new stores as well as the comparable store sales gain.

Company Reiterates 4th-Quarter and Fiscal Year Earnings Guidance

Best Buy said it continues to expect fourth-quarter earnings of $1.56 to $1.66 per diluted share, compared with $1.42 per diluted share from continuing operations for the same period of fiscal 2004. This range is consistent with a fiscal 2005 earnings estimate of $2.80 to $2.90 per diluted share, an average increase of 17 percent compared with $2.44 per diluted share from continuing operations for fiscal 2004. The mean analyst earnings estimate was $1.61 per diluted share for the fiscal 2005 fourth quarter, which ends on Feb. 26, 2005.