As the nation's largest seller of electronic gadgets and gizmos, Best Buy Co. Inc. would seem like just the sort of discretionary retailer that would take a pounding in an economic downturn.
In a February survey, only 19 percent of consumers nationwide said that they would spend money on consumer electronics in the next three months -- a 9-percentage-point decline over a year earlier and the weakest outlook since the survey firm, ChangeWave Research of Rockville, Md., began collecting the data in 2002.
Yet Best Buy has bucked negative economic trends before, and Chief Executive Brad Anderson is confident that the Richfield-based consumer electronics giant can continue to attract more people to its stores despite high fuel prices, tightening credit, a housing crisis and a worsening job market.
At a time when some other giant retailers are posting double-digit sales declines, Best Buy surprised Wall Street on Wednesday by announcing that it expects sales at stores open at least 14 months, known as "same-store sales," to rise 1 to 3 percent for its current fiscal year, which ends Feb. 28.
The retailer also said it plans to boost capital spending to an estimated $1.1 billion, from $800 million, and to move ahead with plans to open 140 new stores this fiscal year; Best Buy opened 155 last year. "This is based on the world as we see it now, and based on the caliber of our people," Anderson said in an interview.
This came the same day that Best Buy reported that earnings in its most recent quarter declined 3.4 percent from a year ago, with same-store sales off 0.2 percent.
But recession or not, there is cause for Anderson's optimism.
Best Buy has a highly profitable and expanding network of stores in China, and the company is rolling out Apple products to more than 600 stores through Apple "store-within-a-store" shops. And although the steady drumbeat of grim economic news has hurt consumer confidence, sales of flat-panel TVs, notebook computers and video games remain strong.