Best Buy boomed on Tuesday.
After reporting strong earnings, Best Buy’s stock soared 16%, hitting a 10-month high. Its sales and profits beat analysts’ expectations by a wide margin. Sales at its stores open a year or longer also surpassed forecasts.
Best Buy’s customers bought big-ticket items like home theater equipment, computers, refrigerators and dish washers. Those products offset declines in purchases of smartphones and video games.
Best Buy pulled in $8.53 billion in revenue, about the same as last year but well above what experts had predicted. It also pulled in $185 million in profits, up 6% from a year ago.
Overall, Americans have been lately shifting more of their spending towards home renovations, furnishings and cars and away from smaller gadgets.
Best Buy is one of the few success stories amid a litany of struggling retailers. Macy’s, Target, Sears & Kmart, Staples, Sports Authority and RadioShack have closed hundreds of stores in the past two years. Macy’s announced earlier in August it would close 100 locations.
Another encouraging sign is that Best Buy’s online sales surged 24% in the quarter. That’s the second straight quarter with online growth above 20%. It’s quite a win, given that almost every other retailer has struggled to compete against Amazon for digital shoppers.
