Best Buy same-store sales surge, tops 4Q expectations
A Best Buy store is pictured in Pasadena, California U.S., February 28, 2017. REUTERS/Mario Anzuoni (Reuters)
NEW YORK (Reuters) - Best Buy Co Inc., the No.1 U.S. consumer electronics retailer, reported a jump in quarterly comparable sales on Thursday that exceeded forecasts amid strong demand, a favorable competitive environment and robust sales in the gaming category.
The company also benefited from better product availability and the exit and decline of some competitors, Best Buy Chief Financial Officer Corie Barry said in a statement.
Shares surged 4.6 percent to $75.75 in premarket trading.
Best Buy's sales at established stores climbed 9 percent in the fourth quarter ended Feb. 3, handily beating analysts' average expectation for a 2.9 percent increase, according to Consensus Metrix.
The company has tried to turn itself around by matching online retailer Amazon.com Inc
The performance continues to be a reversal for a company that had struggled with plunging sales and shrinking profit about six years ago as consumers browsed at brick-and-mortar stores but made purchases online, a practice called showrooming.
Some of Best Buy's competitors, like RadioShack and hhgregg Inc, have closed hundreds of stores and filed for bankruptcy protection.
On Wednesday, the company said it would shut 250 small mobile phone stores in U.S. malls as it looked for ways to operate more profitably and turn around its business amid intense competition.
Best Buy said it expects to incur as much as $65 million in pretax charges from the closures, which could trim its earnings by between 14 cents and 17 cents a share in the first quarter of 2019.
The Richfield, Minnesota-based company's net income fell to $364 million, or $1.23 per share, in the quarter, from $607 million, or $1.91 per share, a year earlier, hurt by new U.S. tax reforms. Excluding these charges, earnings were $2.42 per share.
Analysts had expected earnings of $2.04 per share, according to Thomson Reuters I/B/E/S.
The company's revenue rose to $15.36 billion, beating estimates of $14.5 billion.
(Editing by Bernadette Baum)