Best Buy Sits Pretty

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Electronics retailer Best Buy (NYSE: BBY) is sitting in a curious seat right now. The consumers have gone haywire, archrival Circuit City (NYSE: CC) might be acquired by video rental specialist Blockbuster (NYSE: BBI), and on top of all of that, those tax rebate checks have started to roll in, with retailers fighting for their share of 'em.

Amidst this chaos, Best Buy is simply doing business as usual. The company produced profits of $0.43 per share on about $9 billion in revenue for the first quarter, up from $0.39 and $7.9 billion last year, respectively. Same-store sales were up 3.7% and gross margins held steady at about 24%. The quarter was right in line with management's expectations, so the full-year forecasts remain unchanged.

The secret to Best Buy's success is a local focus on a multinational scale. Regional managers and local store owners have more leeway than most chain retailers' front-line people to adjust store environments and inventory to the sales trends and needs of the particular location, which gives the massive corporate beast surprisingly agile operations. Rolling out in-store Apple (Nasdaq: AAPL) and Dell (Nasdaq: DELL) mini-stores over the past year also helped the same-store sales, thanks to the brands' ubiquitous consumer appeal.

Chief Operating Officer Brian Dunn said: "We have an amazing opportunity to pair the power of our scale with our local insights which are closest to the customer -- and we see many indicators that our growth propositions are working."

Keep that train of thought rolling, and it should be fairly easy to fend off any attacks from a rejuvenated Circuit City-Blockbuster complex, and make advances on big-box big boys like Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) as well. Best Buy is sitting pretty in that weird seat.

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