NEW YORK (CNN/Money) -
American consumers have had a long-standing love affair with gadgets and gizmos, and no company is doing a better job of capitalizing on that than Best Buy.
And even though discount retailing big guns Wal-Mart Stores and Target are encroaching on Best Buy's turf, the company has dug in its heels and remains on top of the consumer electronics heap.
Richfield, Minn.-based Best Buy (BBY: Research, Estimates), the No. 1 seller in the category, is also leaps and bounds ahead of its closest electronics rival, Circuit City, in terms of sales and profitability. And Best Buy has been consistently growing market share by opening new stores at a steady pace.
However, while most analysts agree that Best Buy is a well-run company with a big competitive advantage, there are some concerns about a recent marginal slowdown in sales at its stores open at least a year.
So-called same-store sales rose a healthy 4.3 percent in the second quarter, which ended in August. But that's below the 6.7 percent gain during the same period a year ago. Best Buy will report its full second-quarter sales and earnings results Wednesday.
And faced with a slowing economy, there are also some doubts about how much consumers are willing to spend during this year's holiday shopping season. As a result, shares of Best Buy are now trading nearly 20 percent below their 52-week high. The stock has traded in-line with Wal-Mart this year but has under performed Circuit City and Target.
So are investors right to be worried or will flat-screen TVs and iPods help Best Buy ring up fat sales and profits in the upcoming holiday season? Click here to find out what we think in this week's Hot or Cold? »»