A very merry Christmas at Best Buy with sales booming

Shares soared more than 15 per cent in late morning trading

A very merry Christmas at Best Buy with sales booming

Best Buy put up some big holiday sales numbers Wednesday, more evidence that Americans are willing and able to spend on gadgets and big TVs.

The nation’s consumer electronics chain delivered a better-than-expected 3 per cent increase in sales at established stores for the fiscal fourth quarter. The company also issued an annual profit forecast that was roughly in line with Wall Street expectations.

Shares soared more than 15 per cent in late morning trading.

A dire report from the U.S. Commerce Department this month on retail sales cast a pall over the sector, raising concerns that an extended period of elevated consumer confidence had ended abruptly. But the holiday business has proven to be a mixed bag as some retailers are responding faster to a more competitive landscape as well as a shoppers’ shift to online.

Other notable retailers like Walmart also had big holiday quarters. T.J. Maxx parent reported on Wednesday strong sales driven by more customer visits. Macy’s slogged through a tough holiday season and said on Tuesday that 2019 would remain challenging. Meanwhile, a slowdown in the housing market is tempering sales at home improvement chains Home Depot and Lowe’s.

J.C. Penney, Target and Nordstrom are among the retailers that are slated to report final fourth-quarter figures in the next few days.

Still, a slowdown in the economy could present challenges to retailers. And declining tax refunds could dampen spending in the first quarter. In fact, Best Buy acknowledged that it has seen some weakness in sales during the current quarter as the volume and dollar amount of tax refunds has fallen. It said it was monitoring the situation.

Nevertheless, Best Buy has excelled in holding off increasing competition from Amazon and other players by expanding its online business, speeding up deliveries and adding more services to enhance its relationship with its customers. Online sales now account for 22 per cent of its U.S. business.

It was only a few years ago when skeptics were ready to write the obituary of Best Buy. But under Hubert Joly, who took over the helm as CEO in 2012, the company is being reinvented. While the chain is focusing on driving online revenue, it’s also working to build deeper relationships and increase total revenue from customers who are shopping both online and in stores. That means reducing the time a customer has to spend at the pickup counter.

It’s also means expanding services. Its free adviser service where salespeople visit customers at home to make recommendations on TVs and other electronics has been doing well. As of the latest quarter, it has signed up more than one million members.

The company is also pushing more into the health field, acquiring a company last year called GreatCall that provides emergency response devices for the aging.

Additionally, Best Buy said that it now offers same-day delivery on thousands of items in 40 metropolitan areas and next day delivery in 60 metropolitan areas.

“Historically…we’ve been focused on transactions and selling products,” Joly told investors during the earnings call on Wednesday. “We’re moving toward selling solutions and building relationships. This journey is at the beginning and we’re learning.”

The Richfield, Minnesota, company, posted per-share earnings of $2.72, beating last year’s fourth quarter’s $2.42. It also topped the $2.56 that analysts were expecting, as well as its own previous guidance. For the year, earnings per share came in at $5.32, surpassing last year’s $4.42.

The company estimates earnings for the next fiscal year to be in the $5.45 to $5.65, which is roughly in line with the $5.49 that Wall Street has been projecting.

The nation’s biggest consumer electronics retailer said comparable-stores sales, a key indicator of a company’s health, rose 4.8 per cent for the year, extending its streak to five years of growth.

Best Buy raised its quarterly dividend by 11 per cent, to 50 cents per share. The board of directors also approved a new $3 billion stock repurchase, replacing an existing authorization to repurchase $1.5 billion of the company’s shares.

Shares rose $9.39 per share to $69.72 in late morning trading.

AP Business Writer Matt Ott in Madrid contributed to this report.

Anne D’Innocenzio And Matt Ott, The Associated Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Beef to the plow driver who completely soaked me in dirty slush at the bus stop at Fifth and Hillcrest. I could tell you were driving quite fast so I tried to back up as far as the snowbank would allow but you did not slow down. I am 68 and had to pick up a prescription and had no choice but to continue on soaking wet.
Beefs & Bouquets, March 3

To submit a beef or a bouquet to the Nanaimo News Bulletin, e-mail editor@nanaimobulletin.com

Victoria’s Swartz Bay terminal. (Black Press Media file photo)
BC Ferries offers cheaper, prepaid fare options

Ferry service preparing for busy terminals when travel restrictions are lifted

The City of Nanaimo is administering a petition-against process to determine if property owners in the downtown core are in favour of establishing a business improvement area. (City of Nanaimo image)
Nanaimo’s downtown property owners to decide if they want new BIA

City council votes to administer petition-against process for business improvement association

Police in Nanaimo hope the public can help locate a guitar and travel bag stolen from a vehicle in a downtown hotel parking lot. (Photo submitted)
Gibson guitar, Louis Vuitton bag stolen from vehicle in Nanaimo

Items taken from car in Coast Bastion Hotel parking lot last week

Doug Routley is the chair of a special committee on reforming the Police Act. (File photo)
Routley selected chair of a special committee on reforming the Police Act

Nanaimo-North Cowichan MLA acknowledges there will be a lot of material to process

A rendering of the new Nanaimo Correctional Centre. (IBI Group Architects image)
Designs come in for Nanaimo’s new jail

City’s design advisory panel supports height variance at Nanaimo Correctional Centre

Province invests $2M in three Vancouver Island food hubs

Hub network provides shared-use processing facilities to small agri-businesses

A vial of Oxford-AstraZeneca COVID-19 vaccine is pictured at a family doctor office, Thursday, Feb. 25, 2021 in Paris. THE CANADIAN PRESS/AP -Christophe Ena
Trudeau ‘optimistic’ that timeline for rollout of COVID vaccines can be accelerated

Canada set to receive more than 6M COVID-19 vaccine dose than initially expected, by end of March

Beginning late Tuesday, anti-pipeline protesters blocked the intersection of Hastings Street and Clark Drive in Vancouver. (Instagram/Braidedwarriors)
Demonstrators block key access to Vancouver port over jail for pipeline protester

They group is protesting a 90-day jail sentence handed to a fellow anti-pipeline protester

Langley RCMP will be collecting donations for the local food bank at the Willoughby Town Centre parking lot (20678 Willoughby Town Centre Drive near the Royal Bank) on Saturday Dec. 19 from noon till 4 p.m. (file)
Vancouver police rammed with car while passenger arrested for alleged fraudulent food order

Two officers are in stable condition, suffering with soft tissue injuries following the incident

A discarded blue surgical mask is shown hanging in a bush in Montreal, Sunday, Dec. 6, 2020, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
B.C. RMT suspended for not wearing a mask after confirmed by undercover clients

College of Massage Therapists has 5 open files, said suspension necessary to protect public

Victoria Police Department vehicles outside the headquarters building. (Black Press Media file photo)
Victoria police investigating sudden death in Beacon Hill Park

Police, paramedics responded to a report of an unresponsive person early Wednesday

Most Read