Saturday, August 30th23.2°C
22663
21739

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

21623


Recent Trending




Today's Market
S&P TSX15625.73+67.561
S&P CDNX1023.991.62
DJIA17098.4518.88
Nasdaq4580.271+22.577
S&P 5002003.37+6.63
CDN Dollar0.9194+0.0003
Gold1281.70-2.1001
Oil95.96+1.29
Lumber348.40+2.60
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.08+0.01
Anavex Life Sciences0.25+0.01
Metalex Ventures0.0750.00
Russel Metals36.48+0.09
Copper Mountain Mining2.93+0.02
Colorado Resources0.180.00
ReliaBrand Inc0.10+0.001
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



22831

FEATURED Property
1975477#8-4100 Gallaghers Parkland Dr.
3 bedrooms 3 baths
$849,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...

_





22854


Member of BC Press Council


23002