Best Buy Stock Skyrockets To Highest Point In 6.5 Years Following Q3 Report
Best Buy’s stock soared to its highest level since April 2010 after the Richfield-based electronics retailer reported both sales and profits that exceeded analyst expectations for the August through October period.
Profits rose to $194 million during the third quarter, a 55 percent increase over last year’s result. Its adjusted earnings per share of 62 cents beat Wall Street’s 47-cent prediction, as well as the company’s own guidance of 43 cents to 47 cents per share.
With a 24 percent year-over-year uptick in online sales, Best Buy’s revenue rose to $8.95 billion, just above the $8.82 billion in revenue it had a year ago.
Strong sales in home theater, mobile phones, wearables and connected home devices helped offset the retailer’s decline in gaming-related sales.
“As we enter the fourth quarter and execute against our holiday plan,” said Best Buy CFO Corie Barrie, “we expect to deliver non-GAAP diluted earnings per share in the range of $1.62 to $1.67 compared to $1.53 last year.”
Barrie warned that product recalls, specifically items like Samsung’s Galaxy Note 7 smartphone and its washing machines, would likely drag sales down in the fourth quarter by about $200 million.
“With that incorporated, our fourth quarter enterprise revenue guidance is $13.4 to $13.6 billion,” he said.
Like its local retail competitor, Target, Best Buy is hoping to capitalize on a potentially record-spending holiday season. Best Buy said it would once again offer free shipping on all online orders placed up to Christmas Day, as well as continue its doorbuster deals on Black Friday.
After closing at $40.45 a share on Wednesday, Best Buy’s stock rose to a high of $46.12 on Thursday.