BBY Best Buy Company

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

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(END) Dow Jones Newswires

August 25, 2015 07:45 ET (11:45 GMT)

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