The ratings affirmation comes in the wake of good recent numbers for the electronics megamerchant, which posted a 7.1% comp-store sales increase in fiscal 2004, and a 5.1% increase for the first nine months of fiscal 2005. According to Fitch, the Positive Outlook considers the company's improving operating performance and strong balance sheet, and also reflects strong customer acceptance and market share for the retailer. It also takes in account the cutthroat nature of the consumer electronics industry, particularly in pricing, and the tendency of consumers to be fickle in their shopping patterns, and asserts that Best Buy has the moxie to prosper despite those factors.

"Best Buy maintains a strong position in the growing consumer electronics segment," Fitch noted in a statement released on Friday. "The company's store base growth and improvements to existing stores and sales formats have allowed it to grow sales and increase its market share. Since fiscal 2003, Best Buy has added 144 stores and implemented several programs to help the company meet customer needs and differentiate itself from its competition, particularly the discounters and internet based retailers."

The note also cites some of the retailer's customer service initiatives, such as the Geek Squad, a computer support group, which have been rolled out to all U.S. markets, and "customer centricity," a program of tailoring products and store experience to core customers, which has been implemented in a total of 85 stores.