Best Buy Shares Jump As Online Sales Climb

Best Buy Co Inc, the biggest U.S. electronics chain, reported an unexpected increase in quarterly sales and said it expected consumer spending to remain strong this quarter. Best Buy’s profit jumped 21 percent as the nation’s largest consumer electronics retailer increased sales online and tried to create a better shopping experience in the stores while it also cut costs. A 24% increase in domestic online sales for the second straight quarter, helping nudge up overall revenue in the quarter ended July 30. Investors cheered, sending shares up 20% to $39.23, their highest close since March 2015.

The company, which said it benefited from demand for appliances, TVs and mobile phones, also reported higher-than-expected earnings for the second quarter that ended on Aug. 1.

Best Buy Co. posted results for the latest quarter that reversed a sales slump, easing fears about its ability to lure shoppers amid a long battle with Amazon.com Inc. and other online rivals. Its shares soared 19 percent after the company said online sale rose 24 percent to $835 million.

Sales of health trackers grew, as did those of home theaters and appliances as the U.S. real estate market has surged. New-home sales have climbed 12.4 percent so far this year, and demand has eclipsed the pace of construction.

Best Buy’s revenue rose 0.8 percent to $8.53 billion in the second quarter from a year earlier. Analysts on average had expected $8.29 billion, or a decline of 2 percent.

Net income attributable to shareholders rose to $164 million, or 46 cents per share, from $146 million, or 42 cents per share. Excluding special items, Best Buy earned 49 cents per share, beating the analysts’ average estimate of 34 cents.

Earnings adjusted for one-time gains and costs came to 57 cents per share, 15 cents better than Wall Street had projected,

According to a poll by Zacks Investment Research. Revenue rose slightly to $8.53 billion, topping Street forecasts. Eight analysts surveyed by Zacks expected $8.4 billion.

For the current quarter ending in November. Best Buy expects earnings per share of 43 cents to 47 cents. Analysts expected earnings of 45 cents per share, according to FactSet. The company forecasts revenue for the third quarter of $8.8 billion to $8.9 billion. Analysts expected revenue of $8.77 billion, based on FactSet.

The company’s shares, which had fallen 24 percent in the past six months, were up 14.9 percent at $33.62. Best Buy shares gained $6.33 to $39.13 in midday trading.