Best Buy Blows Past Analyst Expectations For Quarter
Best Buy announced stronger-than-expected quarterly results, signs of a potential turnaround for the struggling retail giant.
Sales of computers, videos games, televisions and appliances helped drive comparable domestic store sales up 3.2 percent for the quarter ending Nov. 1. Revenue was up $9.38 billion, compared to $9.33 billion during the same time last year.
“As we enter the fourth quarter, we are excited about our holiday plan, which has been built around the cumulative progress we have made,” CEO Hubert Joly said in a statement.
The company reported earnings per share of 32 cents, shattering Wall Street’s expectations of 25 cents per share, according to Zacks Investment Research. During the same quarter last year, the company reported earnings of 18 cents per share.
Best Buy credits its “Renew Blue” strategy as a key part of its success. Renew Blue is consists of cost cuts through the supply chain and a new emphasis on web sales, a place where Best Buy hasn’t always had success. An improved selection of inventory and ship-from-store rollout initiative helped boost online sales nearly 22 percent to $601 million.
The positive results come only a few weeks after Joly tried to temper expectations for the company’s holiday season, despite a stronger economy and shopper across the nation expected to spend more than ever.
While announcing second quarter results in August, Best Buy forecasted declines in sales for the third and fourth quarters.
Best Buy’s stock price jumped sharply on new of the results. By mid morning, shares were up nearly 8 percent to $38.24.