Best Buy sees sales surge in fourth quarter

Best Buy shares up on better-than-expected sales

Best Buy shares up on better-than-expected sales

Best Buy's sales at established stores climbed 9 percent in the fourth quarter ended February 3, almost triple analysts' average expectation for a 2.9 percent increase, according to Consensus Metrix.

Moody retail analyst Charlie O'Shea said in a note to investors that while year-over-year online growth was down slightly, the revenue "speaks to the strength of Best Buy's brick-and-mortar footprint, as well as reinforces our view that consumers still value the store experience".

The 250 Best Buy Mobile stores that will no longer exist are mainly mall-based stores that focus (as the name suggests) on mobile devices.

Some of Best Buy's competitors, like RadioShack and hhgregg, have closed hundreds of stores and filed for bankruptcy protection. Macy's broke out of its three-year sales funk, and a strong home-improvement market pushed Home Depot's profit higher.

Looking to the full year, Best Buy said it expects same-store sales to climb as much as 2 percent.

As May approaches, Best Buy will offer employees the opportunity to find other jobs internally or transition to an "in-home advisor" role.

"What's driving the result is us - I'll say, it's our strategy and our execution", Best Buy CEO Hubert Joly said during a conference call Thursday. Sales grew 9% during the quarter, driven by a record-breaking $2.8 billion in online sales alone for the retailer.

That's a big turnaround from a year earlier when the figure dipped 0.9 per cent for the consumer electronics retailer.

The company will continue to sell smart phones in its main retail locations, and the decision does not impact the 52 mobile stores in Canada. The company said new tax legislation reduced earnings per share by $1.17. It expects 2021 adjusted earnings in a range of $5.50 to $5.75 per share, mostly due to the recent tax overhaul. "Fortunately for Best Buy, many of these items need explanation and demonstration, particularly among the less tech-savvy", Saunders agreed. Analysts polled by FactSet predict 2019 earnings of $4.71 per share.

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