Shares of Best Buy surged on Wall Street on Wednesday after the electronics retailer reported better-than-expected fourth-quarter earnings fueled by strong sales of items like wearables and appliances during the holiday season.
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The results from the Richfield, Minnesota-based company further highlight the divide in the retail industry between those which are succeeding in the Amazon era and the firms that are struggling to adjust their business to compete against the e-commerce giant.
Best Buy last year closed all 257 of its Best Buy Mobile stores. In 2018, it also rolled out a new service membership program for $199 per year and introduced a free, in-home consultation service. The firm – like many other U.S. retailers -- has also invested heavily in upgrading its online platform and supply chain operations.
“Going forward, our priority in fiscal 2020 is to continue to transform the company by bringing to market solutions that solve real customer needs and by building customer relationships,” CFO Corie Barry said in a statement.
Best Buy’s revenue decreased year-over-year to $14.8 billion -- which the company attributed to a shorter quarter compared to 2018 -- but still came in higher than analyst estimates. Profits in the quarter were $735 million, or $2.69 per share – also beating Wall Street predictions. Fueling the earnings was a 3 percent jump in same-store sales, the eighth consecutive quarter of growth.
In 2019, the company expects total sales to reach as high as $43.9 billion and profits of $5.65 per share.