Best Buy (NYSE:BBY), the world's largest electronics chain, reported an unexpected 12% increase in profit for its fiscal second-quarter, buoyed by strong sales of large screen televisions and mobile phones. Shares leaped in premarket.
Net income rose to $164mln, or $0.46 per share, for the three months ended August 1, from $146mln, or $0.42 per share, the Richfield, Minnesota-based company said in a statement.
Removing certain items, earnings were $0.49 per share, topping the $0.34 average estimate of 23 analysts polled by Capital IQ.
Second-quarter revenue climbed 1% to $8.53bn from $8.46bn year-over-year. This result also surpassed the Wall Street consensus of $8.29bn.
U.S. sales rose 3.9% to $7.9bn. Same-store sales rose 2.7%. Comparable online sales jumped 17% in the most recent period amid higher traffic
Strength in the domestic segment helped to overpower weakness in the international unit, which was hampered by store closures in Canada, ongoing softness in the Canadian consumer electronics industry and a stronger dollar.
Electronics stores have been struggling to generate more revenue out of consumers able to compare prices online, while sales of gadgets such as cameras, GPS navigation aids, and even tablets and PCs have softened as smartphones get larger and their developers introduce more features into a single device.
Moving ahead, Best Buy expects flat to a low-single digit decline in overall revenue for its current quarter. Analysts had forecast a decline of 6%.
Shares rose as much as 14% to $33.34 in early trading in New York. The stock had closed down 3% on Monday, expanding this year’s slump to 25%.