Best Buy Quarterly Profit Rose, Circuit City Says Loss Widened
Best Buy Co. said its fiscal second-quarter profit and sales rose sharply, boosted by back-to-school shoppers and tax rebates, while its rival Circuit City Stores Inc. said its losses widened because of charges.</br></br>Best Buy, of Richfield, Minn., which has been outperforming its peers all year, said its net income for the quarter ended Aug. 30 more than doubled to $139 million, or 42 cents a share, from $62 million, or 19 cents a share, a year earlier. The results were at the top of its August forecast of 37 cents to 42 cents a share.</br></br>Revenue rose 17% to $5.4 billion from $4.62 billion a year earlier. The company was optimistic about the remainder of the year, saying it expects comparable-store sales, or those at stores open at least 14 months, to climb 6% to 8%, above its prior expectations.</br></br>Bradbury H. Anderson, vice chairman and chief executive officer, said in an interview that consumer spending is "very aggressive right now -- more so than we expected." However, he cautioned some of the demand may slow as last month's child-tax rebates are spent. Mr. Anderson said "a good portion" of its comparable-store gains came from personal-computer sales, which had been falling.</br></br>Circuit City reported a fiscal second-quarter loss of $124.2 million, or 60 cents a share, compared with a loss of $11.2 million, or five cents a share, a year earlier. Slow to respond to industry trends favoring self-service and large product selection, the Richmond, Va., retailer has been remodeling and relocating stores to adapt to the trends. Expenses for refurbishing and moving stores totaled seven cents a share.