Best Buy Shares Jump as Online Sales Climb
August 23 2016 - 8:30AM
Dow Jones News
Best Buy Co. reported an unexpected increase in profit for the
second quarter as it benefited from a jump in online revenue, sales
growth in some consumer electronics and lower expenses.
Shares climbed 14% to $37.50 in premarket trading.
Same-store sales rose 0.8%. The company had projected same-store
sales roughly flat with the year-ago second quarter while analysts
polled by Consensus Metrix had expected a 0.6% decline.
Sales at Best Buy have struggled to grow recently in part
because people have been buying fewer consumer electronics. Sales
at electronics and appliance stores fell 3.9% in the second
quarter, according to the Commerce Department.
But for the three months ended in July, Best Buy said its
domestic segment was helped as growth in health wearables, home
theater, major appliances and computing, which helped offset
declines in mobile phones and gaming. Also, domestic online revenue
rose about 24% due to increased traffic, higher average orders and
better conversion rates.
In its much smaller international segment, revenue declined 1%,
hurt by foreign exchange. Excluding those effects, revenue
increased 4.1%, driven by growth in Canada and Mexico.
Over all, Best Buy reported a profit of $198 million, or 61
cents a share, compared with $164 million, or 46 cents a share, a
year ago.
Excluding items, the company earned 57 cents a share. The
company guided for earnings between 38 cents to 42 cents. Analysts,
in a Thomson Reuters poll, expected 43 a cents a share. Revenue
edged up 0.1% to $8.53 billion, while analysts expected $8.4
billion.
Selling, general and administrative expenses fell 2.1% from a
year ago, and the company also paid a lower income tax bill.
For the current period the company expects per-share earnings
between 43 cents and 47 cents a share, in-line with the consensus
estimate of 45 cents a share.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 23, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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