market news and articles @ firstadopter.com

Press Release
-revenue $12.02 billion (11.98B est), EPS 53c (43c est)
-comp store sales +1.7%, gross margin 24.5%, operating margin 3.1%
-domestic same-store sales improved sequentially each month of the quarter finishing with 8.4% comp in November
-positives: notebooks, flat panel TVs, cellphones, appliances, cameras. negatives: gaming, music, movies
-international comp -4% ex-FX

Guidance
-revenue FY2010 $49-49.5 billion (48.6B est)
-EPS $3.00-3.15 (2.95 est)
-”the company anticipates a lower fiscal fourth quarter gross profit rate than previously expected”

Conference Call
-Black Friday low double-digit comp driven by 1/2 traffic and 1/2 higher average ticket
-November gift card sales +40% y/y, 100% y/y on Friday/Saturday of Thanksgiving weekend
-Christmas is coming later. They will effectively use bundling
-flat panel TVs low double-digit y/y, music/movies negative low double-digit y/y, gaming negative high single-digit y/y
-domestic traffic +3% y/y. average ticket up slightly
-expect Q4 domestic gross margin to be 80-100bps lower

Q&A
-weaker gross margin is “principally mix” driven. They will drive revenue in computers and entry-level TVs. 75% higher sales of lower margin products, 25% anniversarying last year’s unique vendor buys
-computing growth strong and they are gaining market-share. net-books and notebooks doing well
-flat panel ASP -17% y/y, -22% dollar per inch y/y

Net-net
-November quarter was fine. However the weaker gross margin guidance for the holiday quarter clocked the stock 8.5% today to $41.53. Not surprising as the company was at its 52-week high
-comp sales continue to improve month by month
-laptops and net-books were very strong. Music/movies/gaming remain weak
-At $41.53, it’s trading at 13.5Xs earnings power of $3.075