Best Buy reported better-than-expected results for its holiday quarter, thanks to a lift in demand for smartphones and appliances.
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Earnings for the Richfield, Minnesota-based electronics retailer rose 1.4 percent to $745 million, or $2.84 a share, in the three months through January. Adjusted earnings of $2.90 a share and revenue of $15.2 billion, a 2.7 percent increase, were both better than anticipated.
Shares rallied on the news.
Domestic comparable sales climbed 3.4 percent from a year ago while domestic comparable online sales jumped 18.7 percent to $3.52 billion. Overall, same-store sales were up 3.2 percent, outpacing an expected gain of 1.9 percent.
“We offered compelling holiday deals that resonated with customers and provided a seamless shopping experience, great inventory availability and fast and free delivery,” CEO Corie Barry said in a statement.
Comparable sales growth was driven by headphones, computing, appliances, mobile phones and tablets, pared somewhat by the gaming business.
Best Buy raised its quarterly dividend by 10 percent to 55 cents a share.
The company is closely monitoring the impact of the covid-19 coronavirus outbreak on its supply chain and said it expects the "majority of the impacts to occur in the first half of the year."
Sales at stores open at least 12 months may grow as much as 2 percent this year, the company projected. Adjusted earnings, including the coronavirus impact, will likely be $6.10 to $6.30 a share, well ahead of the $5 that analysts surveyed by Refinitiv were expecting.
Best Buy shares fell 6.4 percent this year through Wednesday, worse than the S&P 500's 3.5 percent drop.