Best Buy Q4 Earnings Up on Strong Music and DVD Sales; Rival Circuit City Eyes Canada, Music Downloads31 Mar, 2004 By: Erik Gruenwedel
Double-digit growth in music and DVD sales coupled with nearly 10 percent increase in same-store sales helped Minneapolis-based Best Buy post fourth quarter (ended Feb. 28) net earnings of $469 million on revenue of $8.4 billion, or $1.42 per diluted share, compared to $311 million on revenue of $6.9 billion, or 96 cents per diluted share for the same period last year.
“Our focus on the customer has resulted in [our] highest market share,” said Best Buy chairman/CEO Brad Anderson.
Competitor Circuit City Stores reported fourth quarter (ended Feb. 29) earnings of $89.5 million on revenues of $3.2 billion, or 43 cents per diluted share, compared to $70.9 million on revenue less than $3.2 billion, or 34 cents per diluted share.
However, for fiscal year 2004, Richmond, Va.-based Circuit City posted a loss of $89 million, or 43 cents per diluted share, compared to earnings of $82 million, or 29 cents per diluted share last year.
“We are not satisfied with our sales and earnings performance for FY 2004,” said Alan McCollough, chairman/president/CEO of Circuit City, in a statement to investors.
To help rebound, Circuit City announced that it had agreed to purchase InterTan, an Ontario, Canada-based electronics retailer, and MusicNow, a Chicago-based online music service.
The company also plans to open up to 70 superstores in FY 2005, after opening, relocating and shuttering a combined 45 stores in FY 2004.
Citing last year's exclusive four-disc DVD boxed set release “Four Flicks” as a harbinger of aggressive forays into music and video, Best Buy president/COO Al Lenzmeier, in a conference call with investors, said the Rolling Stones release has yielded “14 times Platinum” in sales.
To date, “Four Flicks,” has not been officially certified by the Recording Industry Association of America, which qualifies a Platinum DVD as achieving either 50,000 units/$1 million in sales or 100,000 units/$2 million in sales.