Top electronics retailers report strong sales

MINNEAPOLIS -- Retailers who wondered where their customers went during a so-so holiday season might have tried looking in the TV aisles at Best Buy and Circuit City.

The nation's two largest consumer electronics retailers both reported strong holiday revenue Friday driven by surging sales of high-end televisions and larger average purchases. December sales jumped 5.8 percent at Best Buy Co. Inc. stores open at least 14 months. The increase was 10.8 percent at Circuit City Stores Inc. locations open at least a year, a key industry barometer of a retailer's health.

Best Buy said fourth-quarter earnings would be near the top of its earlier guidance - previously announced at $1.06 to $1.16 per share - and its stock rose $3.55, or more than 8 percent, to close at $47.05 on the New York Stock Exchange.

Circuit City shares rose 15 cents to close at $22.94. Best Buy shares had been knocked down from around $50 a share in December by a disappointing outlook, while Circuit City shares have been climbing steadily from about $16 a share in September.

Both companies said sales of flat-panel TVs more than doubled at existing stores, and reported double-digit percentage increases in digital audio player sales.

Both reported declines in sales of DVD players.

Both said video game hardware sales rose during the first full month of Xbox 360 sales, though Best Buy said video-game software declined as customers slowed purchases for existing platforms.

Analysts said the two retailers are benefiting from the gift-giving shift toward TVs and gadgets.

"For the first time, both industry leaders are posting numbers suggestive of a strong product cycle," Goldman Sachs analyst Matthew Fassler wrote in a note to clients.

Best Buy Vice Chairman and Chief Executive Brad Anderson said he was "pleased and encouraged by the fact that virtually all of our businesses met or exceeded our expectations for December. As usual, customers shopped later than ever and results strengthened as the month progressed."

Both companies said overall revenue rose 12 percent from December 2004, to $5.7 billion for Best Buy and $1.98 billion for Circuit City. Cutlinefile/associated press

Shoppers examine cameras at Circuit City in San Francisco. Best Buy Co. Inc. and Circuit City Stores Inc. both reported strong sales during December.