Best Buy surprises all over the place in second quarter

Published 8:49 am Tuesday, August 23, 2016

RICHFIELD, Minn. (AP) — Best Buy’s profit jumped 21 percent as the electronic retailer revved up online revenue during the second quarter at the same time that it cut costs.

Shares soared 16 percent to $37.99 before the stock market opened Tuesday.

As online sales rose, so too did revenue at established stores, an important measure of a retailer’s health. Comparable store sales rose 0.8 percent when Wall Street, according to a survey by FactSet, had expected a decline of 0.4 percent.

Email newsletter signup

“We saw continued positive momentum in our online sales – delivering a second straight quarter of nearly 24 percent growth,” said Chairman and CEO Hubert Joly. “We also continued to deliver cost savings and drive efficiencies in the business.”

Those online sale reached $835 million, a beacon for investors who have watched eat away at the sales of almost every traditional retailer.

Strong sales of home theaters, appliances and health trackers grew, offset declining sales of mobile phones and video games.

Best Buy Co., based in Richfield, Minnesota, reported net income of $198 million, or 61 cents, in the three months that ended July 30, compared with $164 million, or 46 cents per share, in the same period a year before.

Earnings, adjusted for one-time gains and costs, were 57 cents per share, 15 cents better than Wall Street had projected, according to a poll by Zacks Investment Research.

Revenue rose slightly to $8.53 billion, topping Street forecasts. Eight analysts surveyed by Zacks expected $8.4 billion.