Best Buy (NYSE:BBY) continues to show who's in charge, reporting yesterday that third-quarter same-store sales grew 8.6%. But the stock lost 6% to $54.15 when the company also announced it would take a surprise $13 million charge -- or $0.03 per share -- to write-off technology assets. Management also narrowed its third-quarter earnings estimate to between $0.35 and $0.37, from $0.33 to $0.38 per share.
For the quarter, total sales jumped 18% to $6.03 billion, as Best Buy continues to gain market share in notebook computers, advanced TVs, digital cameras and camcorders. At the same time, a revamped Circuit City (NYSE:CC) saw revenues decline modestly, with comps down 1%.
Interestingly, Best Buy also conceded that, "comparable store sales for video game hardware and software declined by the low double digits." In what was supposed to be a promising holiday season for video games, the company said that lower hardware prices and slow software sales hurt results.
This news put a huge damper on shares of pure-play video game retailers Electronics Boutique (NASDAQ:ELBO) and GameStop (NYSE:GME). For more on holiday video game retail sales, checkout SwapUSA's After Thanksgiving Report on our Video & PC Games discussion board.
In addition to being a royal pain to Circuit City, Best Buy has made the right moves for its own shareholders. After deciding that the unit was biting too much in to earnings, Best Buy finally shed Musicland in June. In October, the company announced that it would pay its first dividend.
Longer-term, BestBuy.com should become a force, given the company's ability to offer free shipping on media. Near term, investors can look forward to Dec. 17, when both Best Buy and Circuit City report earnings.
Discuss Best Buy's future on -- where else? The Best Buy discussion board! Only at Fool.com. Jeff Hwang can be reached at [email protected].
