Best Buy Co Inc shares surged Tuesday after the retailer revealed fourth-quarter profit expectations above analysts’ expectations, a signal of confidence in upcoming holiday sales.
The company projected adjusted earnings between $2.65 to $2.75, topping Street expectations of $2.65. Best Buy shares jumped more than 10% to $82.07 on Tuesday.
According to a report from Reuters, Best Buy’s investment in subscription-based tech support and repair services has strengthened its position evan as US consumer spending has slowed faster than expected.
“The typical Best Buy customer is at or slightly above median income, and this group is currently thriving,” Wedbush analyst Michael Pachter said, according to Reuters.
“At the same time, there are an increasing number of new consumer electronics products that have captured interest, including items in the mobile, smart home and wearables categories, all of which Best Buy excels at.”
The company’s third-quarter results revealed revenue of $9.79 billion, up year-over-year nearly 2% and topping Street estimates of $9.7 billion. Adjusted earnings came in at $1.13 per share, a 21% increase from $0.93 per share and ahead of analysts’ average projection of $1.03 per share.
—Updated to include stock movement—
Contact Andrew Kessel at [email protected]
Follow him on Twitter @andrew_kessel