Published March 01, 2013
Best Buy (BBY) sharply narrowed its fourth-quarter loss on Friday amid stronger online sales and demand outside the U.S. and said cost-cutting efforts have started to pay off.
The surprising earnings come a day after the passing of a deadline for Best Buy founder and former chairman Richard Schulze to make an official bid for the ailing retailer.
"The company received no such offer and will continue to focus on its transformation for the benefit of its stakeholders," Best Buy said in a statement.
The Richfield, Min.-based consumer electronics giant reported a loss of $409 million, or $1.12 a share, for the fourth quarter, compared with a year-earlier loss of $1.82 billion, or $5.17.
Excluding one-time items, Best Buy said it earned $1.64 a share, topping average analyst estimates of $1.54 in a Thomson Reuters poll.
Revenue for the three-month period was $16.71 billion, up from $16.67 billion a year ago and beating the Street's view of $16.34 billion.
"To deliver these better-than-expected results, renewed momentum in the domestic business more than offset continued softness in the International business," said Best Buy CEO Hubert Joly. "It was a quarter that was driven, not given and we are encouraged by the intensity, collaboration and momentum that was generated by both our front line and corporate teams."
Shares of Best Buy climbed about 4% premarket to $17.10.
While stronger international demand and online sales helped offset domestic weakness, same-store sales, a measurement of sales at stores open longer than a year, slumped 0.8%.
Best Buy has been trying to streamline costs amid years of disappointing financial results by cutting down management layers, laying off hundreds people and discontinuing non-core activities.
It initiated the first phase of its "renew blue" cost reduction plan earlier this year, which has so far totaled some $150 million in annualized savings.