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Best Buy Has a Stronger Pulse

NEW YORK (TheStreet) -- Another quarter is in the books, which means Best Buy (BBY), which has been on a perpetual deathwatch, has survived another three months.

The bears, meanwhile, are still not ready to stamp the grim reaper's passport and kindly send him on his way. With the behemoth known as Amazon.com (AMZN) not going anywhere and seemingly doing no wrong, the shorts continue to show incredible patience and are biding their time. But Best Buy's not making it easy.

Although the company is still struggling with margins and same-store sales, the level of erosion is improving, which is to say there are clearer signs of progress. The fact that revenue declined again this quarter is a popular point being raised by the skeptics. But in all honesty, the fact that revenue declined by less than 1% has to be viewed as a "win" (of sorts) to anyone who can be objective.

Along similar lines, I'm willing to applaud the fact that "comps," or same-store sales, also declined by less than 1%. This is the metric that tracks the performance of stores that have been opened at least one year. You have every right to be unimpressed by this. But just to keep things in perspective, Wal-Mart (WMT), the world's largest retailer, didn't grow comps at all in its recent quarter.

McDonald's (MCD), meanwhile, grew comps at just 1% year over year. But McDonald's remains on everyone value menu. I'm not here to compare McDonald's to Best Buy, but both companies operate within the consumer discretionary space. Gven that McDonald's has attributed its underperformance to the slower-than-expected growth of the economy, it's only fair to offer similar considerations to Best Buy.

Besides, given how dominant Amazon has been and the carnage that it has left behind -- including CompUSA, Media Play and Circuit City -- the fact that Best Buy is still around is a marvel. This is to say nothing about the wounded operations for which Amazon is solely responsible -- a group that includes (among others) Barnes & Noble (BKS).

But Best Buy has other ideas. Given that inventory was down roughly 7%, it certainly appears as if management's recovery efforts are beginning to pay handsome dividends. It's foolish to pretend otherwise. What's more, the company's partnership with Samsung, which introduced the "store-within-a store" concept, has brought new life back into the stores.

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