Best Buy Bests Circuit City, Again

Typically, you can count on two hands, at most, the number of college football teams that have a legitimate shot any year at the national championship. Often, you need only two fingers. Last year, for example, the pollsters were pretty convinced before the season that the USC Trojans and the Texas Longhorns would battle for the title. They were right. This year, my beloved Ohio State Buckeyes were ranked No. 1 in the preseason, and they remain on top as they square off against the Florida Gators on Monday.

The electronics-retailing world is not much different. The playing field is consistently dominated by two major players: Best Buy (NYSE: BBY  ) and Circuit City (NYSE: CC  ) . And for the longest time now, it seems, we could count on one finger which one was going to come out on top.

It is no surprise, then, to see Best Buy once again kick Circuit City's rear in the latest comparable same-store-sales battle. Best Buy's December comps were higher by 7%, with total revenue up 15%. Circuit City, on the other hand, trailed behind with a comps increase of 4.2% and a total sales rise of 5.9%.

Flat-panel TVs drove sales on both fronts, along with other categories such as video games and MP3 players. This news should bode well for Microsoft (Nasdaq: MSFT  ) , Apple (Nasdaq: AAPL  ) , Electronic Arts (Nasdaq: ERTS  ) , and Activision (Nasdaq: ATVI  ) , among others.

We didn't need a fortune teller to reveal to us that Best Buy would beat Circuit City in December. When I investigated the latest conference calls for both retailers, Circuit City made it pretty clear that its promotional shortcomings would continue through the holiday season. Meanwhile, Best Buy was feeling good about its own promotional activity.

The BCS National Championship game will be played out in the Arizona desert this Monday night, a giant matchup to determine this year's top team. The game showcasing the two most dominant electronics retailers, however, doesn't have quite the same mystery surrounding it -- short of a Hail Mary, we already knew which company would come out on top in December. The only mystery was by how much it would beat the point spread.

Related Foolishness:

Do you think Circuit City has a chance to stage a comeback in 2007 against its archrival Best Buy? Voice your opinion and share it with fellow investing fans from around the world, for free, at The Motley Fool's new stock rating system, Motley Fool CAPS.

Microsoft is an Inside Value recommendation. Best Buy, Electronic Arts, and Activision are Stock Advisor selections. Either newsletter is available for a free 30-day trial.

Fool contributor Jeremy MacNealy has a CAPS rating of 93.60 and is ranked 1,235 out of 19,281 participants. He has no financial interest in any company mentioned. The Motley Fool has a disclosure policy.


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