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,
, 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,
, 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.
The reason for the performance was the same, with television comparable-store sales up in the double digits and flat-panel comps up in the triple digits.
"In December we saw strength in a broad number of categories, but we saw significant strength in flat panel televisions, MP3 players and accessories, notebook computers, video game hardware, navigation products and imaging products," Circuit City said.
The company boosted its forecast for full-year sales growth to 10% to 12%, from 8% to 10%. Domestic same-store sales growth should be in the upper-single digits, up from its previous forecast of mid- to upper-single digits.
Like Best Buy, Circuit City's fiscal year ends next month. Unlike Best Buy, Circuit City did not comment on its earnings expectations.
"Circuit City is especially aggressive with their promotions, and they're especially good at it," Hastings said. "The fact that they're not commenting on their earnings could mean their margins took a hit, but maybe they're just not commenting now."
Shares of Circuit City recently were up 10 cents, or 0.4%, to $22.89.