Best Buy Posts Higher Profit on Notebook Sales
Retailer Best Buy reported better-than-expected quarterly earnings Tuesday, helped by strong international results and demand for notebook computers, flat-panel televisions and video games, and its shares rose 5%.
The company also raised the low end of its full-year profit forecast.
Net earnings came to $250 million, or 55 cents a share, for the second quarter ended Sept. 1, compared with $230 million, or 47 cents a share, a year earlier.
Analysts on average expected profit of 44 cents a share, according to Reuters Estimates.
Revenue rose 15% to $8.75 billion, better than the $8.45 billion analysts expected. Sales at stores open at least 14 months, or same-store sales, rose 3.6%. Best Buy cited demand for notebook computers, flat-panel televisions and video gaming.
Same-store sales fell 7.1% in the appliance category amid the slower U.S. housing market, Best Buy said.
International revenue rose 54% to $1.5 billion.
The Minneapolis-based company and rival Circuit City Storesface challenges as woes in the housing market and rising fuel costs pressure consumer spending. But Best Buy has been trying to lure shoppers by focusing more intensely on consumer needs.
"We believe we gained market share in a very challenging environment," Best Buy President Brian Dunn said in a statement.
The company said it expected full-year earnings at the top half of its forecast range of $3 to $3.15 a share, an improvement from its previous outlook of $2.95 to $3.15.
Analysts currently expect profit of $3.03 a share for the year, according to Reuters Estimates.
Best Buy said same-store sales should rise near the midpoint of its previous forecast range of 3% to 5%.
At Monday's close, the stock had fallen about 9% this year, while Circuit City was down 47%.