Huge TV Sales Are Huge

Updated from 9:39 a.m. EST

Americans' love affair with giant television sets gave investors some holiday cheer that was missing elsewhere on the retail landscape.

December's 3.2% overall gain in same-store sales at discount, specialty and department store chains -- as reported by the International Council of Shopping Centers -- was greeted with a yawn by Wall Street. Meanwhile, sales results from two major consumer electronics retailers, Best Buy (BBY Quote) and Circuit City (CC Quote), found the holiday sweet spot.

"Shoppers spend huge amounts of money on electronics, particularly digital and flat-screen televisions," said Bernard Sands analyst Richard Hastings. "Some of this comes from technology obsolescence. People need to upgrade some of their old electronics products to use their new gadgets."

Best Buy said December same-store sales rose 5.8%, while total sales jumped 12% to $5.7 billion in the month. The results reflected triple-digit comps in flat-panel television monitors.

While promotional activity was particularly prevalent in retail this season, Best Buy allayed concerns about its profit margins. The retailer said fourth-quarter earnings should be at the top of its previous $1.06- to $1.16-a-share range. Analysts surveyed by Thomson Financial were forecasting $1.12 a share for the quarter, on average.

On a same-store basis, consumer electronics sales were up 13.5%, while home office sales rose 1.7%, entertainment software sales fell 3.6% and appliance sales rose 7.7%.

"We're pleased and encouraged by the fact that virtually all of our businesses met or exceeded our expectations for December," said the company's vice chairman and chief executive, Brad Anderson, in a statement. "As usual, customers shopped later than ever, and results strengthened as the month progressed."

Shares of Best Buy recently were up $3.39, or 7.8%, to $46.89.

Best Buy's smaller rival, Circuit City(CC Quote), had a similar blowout month, posting a 10.8% jump in same-store sales. Overall sales rose 12.1% to $1.98 billion in December.