The electronics retailer managed to reverse two quarters of revenue declines, a sign that its turnaround drive may be gaining traction. Fred Katayama reports.
Best Buy has finally gotten more consumers to buy. The retailer managed to grow revenue in a weak consumer electronics market, reversing two quarters of declines. That helped quarterly profit nearly double, cruising by analysts estimates. While Best Buy has been able to grow profits through its restructuring program, it had been doing so by shrinking spending, not by growing the business ... until now. Comparable store sales in the U.S. rose more than 3 percent --- its strongest in four years -- as consumers picked up computers, gaming devices and TVs. Online sales did even better, rocketing 22 percent. Best Buy CEO Hubert Joly said he's "excited" about its plans as the retailer enters the holiday shopping season. But his CFO said she's concerned about what could be a very promotional environment. In the last holiday season, Best Buy's sales fell as rivals slashed prices. Under Joly, Best Buy has been matching prices to stop customers from going to Amazon and adding stores-within-stores such as kitchen, home and design stores, to goose sales. SunTrust Robinson Humphrey analyst David Magee said, "While the environment will be promotional for sure, we think Best Buy will benefit from a better product mix and a more sophisticated approach to discounting." The results electrified investors, pushing the beleaguered stock sharply higher in early trading.