Wednesday, April 16th7.4°C
17283
20654

Best Buy return to profit in 4th quarter and tops Wall Street expectations as it cuts costs

MINNEAPOLIS - Best Buy returned to a profit in the fourth quarter and topped Wall Street expectations as it cut costs to offset declining sales.

The specialty electronics retailer says it gained market share during the quarter and shares jumped 7 per cent in morning trading Thursday.

Best Buy has been dealing with increased competition from online stores, notably Amazon.com, and discounters like Wal-Mart. Under CEO Hubert Joly, the company has tried to turn around results, revamping merchandise, training employees and cutting costs.

That hasn't been enough to reverse a sales decline. Revenue in stores open at least 14 months, a key retail metric, fell 1.2 per cent in the U.S. during the quarter, which includes the key holiday season. November and December can account for up to 40 per cent of total sales for retailers.

But it was better than the 3.2 per cent decline in revenue the entire consumer electronics industry faced, according to NPD data Joly cited.

"The fourth quarter was an environment of declining retail traffic, intense promotion, fewer holiday shopping days and severe weather," Joly said in a statement. "In the face of these unusual circumstances, our strategy to be price competitive and provide an improved customer experience resulted in market share gains in a weaker-than-expected consumer electronics market."

Best Buy has also introduced shop-within-shops — dedicated store space and signage for top brands like Apple, Samsung and Microsoft.

"We expect more and better of the same in this category," Joly said.

The company has cut costs aggressively and during the quarter, annualized cost reductions increased by $260 million.

Total annualized savings have now reached $765 million, exceeding the target laid out by Joly in 2012, and on Thursday, Best Buy upped that target to $1 billion.

Net income after paying preferred dividends totalled $293 million, or 83 cents per share. That compares with a loss of $409 million, or $1.21 per share last year.

Excluding one-time items such as restructuring costs, asset impairments and other costs, net income was $1.24 cents per share, easily beating the $1.01 that analysts had projected, according to a poll by FactSet.

Revenue fell 3 per cent to $14.47 billion from $14.92 billion. Analysts expected revenue of $14.67 billion.

Shares rose $1.82 to $27.64 in morning trading. The stock has fallen fell 35.3 per cent since the beginning of the year.

The Canadian Press


Read more Business News

20304


Recent Trending




Today's Market
S&P TSX14427.30+123.38
S&P CDNX993.040.94
DJIA16404.43141.87
Nasdaq4073.20+39.039
S&P 5001858.63+15.65
CDN Dollar0.9082-0.0027
Gold1301.20+1.20
Oil103.65-0.10
Lumber327.10+2.90
Natural Gas4.535-0.032

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.25-0.02
Cantex0.045-0.005
Anavex Life Sciences0.36-0.02
Metalex Ventures0.08+0.005
Russel Metals30.62+0.35
Copper Mountain Mining2.41+0.09
Colorado Resources0.2650.00
ReliaBrand Inc0.12-0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.23-0.02

 
19691


20820

FEATURED Property
18870271075 Leathead Road
1 bedrooms 1 baths
$1,050,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...


Quick and nimble

Photo: ContributedFor many businesses this has been a tremendously difficult time since the 2008 crisis. Business fell off. Sales techniques that always worked, well… stopped working. Customers...


Keeping a clear focus on the future

Many times when we are gripped by fear it can be one of two mental challenges that we can learn to overcome. Photo: ContributedThe Fear is completely imaginary. In this situation there may be no fact...

_



21641

21604


Member of BC Press Council


21188