Best Buy Profit Rises More Than Expected
August 25 2015 - 8:00AM
Dow Jones News
Best Buy Co. on Tuesday reported a better-than-expected 12%
increase profit in its second quarter, as sales of large-screen TVs
and phones continued to drive sales growth.
Shares of the company added 12% premarket to $32.80.
Best Buy has eked out stronger profits lately amid cost cuts.
The company said earlier this year that it is aiming to cut another
$400 million in costs over the next three years, while closing its
Canadian chain Future Shop to focus attention on its namesake
brand.
Meanwhile, sales of televisions and mobile phones have helped to
offset shrinking sales of tablets and personal computers.
Electronics stores have struggled to wring 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
weakened as smartphones get larger and their developers squeeze
more features into a single device.
For the second quarter ended Aug. 1, the company posted earnings
of $164 million, or 46 cents a share, up from $146 million, or 42
cents a share, in the prior-year period.
Excluding restructuring charges and other items, per-share
earnings grew to 49 cents from 42 cents a year earlier.
Revenue ticked up to $8.53 billion from $8.46 billion a year
earlier.
Analysts polled by Thomson Reuters projected 34 cents a share in
earnings and $8.29 billion in revenue.
Domestic sales excluding newly opened or closed locations grew
3.8%. Excluding the impact of installment billing, same-store sales
were up 2.7%, compared to a 2% decline a year earlier.
Comparable online sales jumped 17% in the most recent period
amid higher traffic, though growth slowed from the 22% increase in
the prior-year period. Best Buy has invested in its Web operations
amid concerns its stores were becoming little more than a testing
ground for products ultimately purchased online.
Chief Financial Officer Sharon McCollam noted that recent market
volatility hasn't measurably impacted the company.
"It is difficult to know, though, if the recent volatility in
the financial markets will affect overall consumer spending," she
said in a news release.
For its current quarter, Best Buy expects flat to a low-single
digit decline in overall revenue.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 25, 2015 07:45 ET (11:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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