Best Buy (NYSE:BBY) Comp Sales Down 4%, Faces Pricing Pressure from Wal-Mart (NYSE:WMT), Target (NYSE:TGT)

Best Buy (NYSE:BBY) got by in the fourth quarter better than they may have because of currency exchange rates and new stores offsetting same-store sales decline. That could change as ongoing price pressure for retail giants Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) continue to weigh on the company.

Canaccord says, "The electronics retailer reported on Friday that revenue for the fiscal month of December decreased 1.6% to $8.4 billion. The decline was due primarily to a comparable-store sales decline of 4.0% partially offset by the addition of new stores in the past 12 months and the favorable impact of fluctuations in foreign currency exchange rates. Best Buy is facing strong price competition from multi-line retailers like Target (NYSE:TGT) and Wal-Mart (NYSE:WMT). 'December sales results were within our expected range of outcomes for the month,' said Brian Dunn, CEO of Best Buy. The company’s domestic segment revenue declined 3.2% to $6.5 billion, which was driven by a 5.0% decline in same store sales. Continuing softness in music and movies led to a 15.4% decline in the company’s entertainment software category comparable store sales. The consumer electronics category posted a 7.9% comparable store sales decrease due primarily to a low double-digit decline in television sales, which was partially offset by strength in e-readers. A mid single-digit comparable store sales increase in mobile computing further contributed to the growth in the category driven by strength in tablet computers. The appliances category experienced a 10.9% comparable store sales increase and the services category recorded a 7.6% comparable store sales increase. Domestic online revenue in fiscal December increased 13% from last year. The international segment’s revenue increased 4.5% to $1.9 billion. The revenue gain was driven primarily by favorable fluctuations in foreign currency exchange rates and the addition of new stores in the past 12 months, partially offset by a comparable store sales decline of 0.1%. The company announced that it is maintaining its prior guidance of full year earnings of $3.20-3.40, which is a bit below the $3.45 forecast by analysts for the year. Best Buy expects to report its Q4 results on March 24, 2011."

Best Buy closed Monday at $35.91, gaining $0.54, or 1.53 percent. Target closed at $55.22, up $0.17, or 0.31 percent. Wal-Mart closed at $53.73, losing $0.35, or 0.65 percent.