UPDATE 1-Tight cost controls boost Best Buy quarterly profit
Aug 20 (Reuters) - Best Buy Co Inc reported its first quarterly profit in a year on Tuesday as the world's largest consumer electronics chain kept a tight lid on costs.
Earnings and sales beat analysts' estimates, and Best Buy shares rose 15.7 percent to $35.55 in trading before the market opened.
Under Chief Executive Officer Hubert Joly, who took the helm last fall, the retailer has removed layers of management, cut jobs, closed some underperforming stores and decided to shed noncore assets such as its stake in a European joint venture with Carphone Warehouse Group to lower costs.
The company has also been matching rivals' online prices, dedicating more in-store space to faster-growing products such as smartphones and tablets. It has also invested in employee training, store revamps and its website.
Wall Street has cheered Best Buy's decision to let vendors such as Samsung Electronics and Microsoft Corp run their own boutiques within the retailer's stores, saying this has helped solve such issues as excess square footage, store service and pricing pressures.
Net earnings rose to $266 million, or 77 cents a share in the second quarter ended Aug. 4 from $12 million, or 4 cents a share, a year earlier.
Excluding special items, the company earned 32 cents a share, while analysts on average expected 12 cents.
Sales fell 0.4 percent to $9.30 billion, but topped the analysts' average estimate of $9.13 billion, according to Thomson Reuters I/B/E/S.
Sales at stores open at least 14 months fell 0.6 percent, including a 0.4 decline domestically. The company attributed the lower domestic same-store sales to "short-term disruptions," including the rollout of the Samsung and Microsoft boutiques.
"The Windows stores-within-the-stores take several days to install," Best Buy spokesman Matt Furman said on Tuesday.