You know you're in a tough retail environment when you celebrate the fact that holiday sales came in "flat."
In serious need of a win, Best Buy (NYSE: BBY ) notched another revenue drop over the holiday season. But for a welcome change, comparable-store sales growth in the U.S. wasn't negative. It came in at exactly 0.0%. CEO Hubert Joly said that was part of the plan to "stabilize and then begin improving our comparable store sales." Given the company's recent struggles, flat is a relief.
Getting to zero
Best Buy got there by selling more mobile phones, tablets, and appliances this year, balancing out further declines in PC and television sales. The company's website also chipped in to the recovery. E-commerce delivered a 10% revenue bump, up to $1.1 billion.
Those results stack up well against other struggling retailers. Total sales at Sears (NASDAQ: SHLD ) fell by 1.8% over the holidays, as the consumer electronics category pulled down revenue at both Kmart and Sears locations. But when you take that category out of the mix, Sears said its comparable sales actually rose by 2.4%.
And GameStop's (NYSE: GME ) holiday results were no better. The video game retailer saw domestic sales fall by 3.5% after Nintendo's new game console failed to bring in enough store traffic. Still, GameStop joined Sears and Best Buy in logging solid online sales growth. GameStop saw a 40% jump in digital sales. And Sears trumpeted a 20% bounce in revenue from its websites.
Zero isn't free
Still, revenue growth isn't much of an achievement if you have to lose money to get there. We know that Best Buy's sales were boosted by the company's holiday price-matching plan, which was supposed to protect market share from the Amazon.com juggernaut.
But we'll have to wait until Best Buy reports its full-quarter results to see the impact of the program on profits. Considering that Target just expanded its own price-matching program, it's possible that the margin squeeze won't be so bad.
Still, even flat profit growth is out of the question for Best Buy. Analysts are expecting the company to earn $1.52 a share for the full quarter, well below the $2.47 it booked last year.
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