Best Buy Posts Higher Profit, Raises Year Forecast

Consumer electronics retailer Best Buyreported a better-than-expected 52 percent jump in quarterly profit Tuesday and raised its full-year earnings forecast.

Oliver Quillia for

However, the company said it also expects that its fourth-quarter earnings will be pressured by a calendar shift that added selling days to the third qurater as well as an extra week in the year-earlier period.

"Earnings will be constrained by the loss of the 53rd week from last year and the shift of the holiday shopping week into Q3 of this year," Jim Muehlbauer, finance chief for U.S. operations, said during a conference call.

In the third quarter ended Dec. 1, profit rose to $228 million, or 53 cents a share, for the third quarter ended Dec. 1, from $150 million, or 31 cents a share, a year earlier.

Analysts' average forecast was 41 cents a share, according to Reuters Estimates.

Revenue rose 17 percent to $9.9 billion, topping analysts' average forecast of $9.4 billion. Sales at stores open at least 14 months, or same-store sales, rose 6.7 percent.

Best Buy said sales were helped by higher selling prices and a calendar shift that added an extra week of sales after the Thanksgiving Day holiday, which typically brings increased customer traffic.

U.S. revenue rose 15 percent while international sales jumped 32 percent.

Minneapolis-based Best Buy and rival Circuit City Storesface challenges as the U.S. housing slowdown and rising fuel and food costs pressure consumers.

But Best Buy has been luring shoppers by focusing more intensely on consumer needs, and the company is expected to be a key beneficiary this holiday season as consumers buy electronics.

"We believe we are profitably growing our market share," President Brian Dunn said in a statement.

Best Buy said it now expects full-year earnings of $3.10 to $3.20 a share, up from a September forecast of $3 to $3.15. The retailer also said it expects to open 150 stores during fiscal 2008, up from its prior forecast of 130 to 135.

The calendar changes that could affect the current quarter include the extra week that boosted third-quarter sales, and the fact that the current quarter includes 13 weeks vs 14 a year earlier.