Best Buy posts surprise increase in quarterly sales

Best Buy shares rose sharply after the earnings report came out and held about 11 percent higher in the premarket trading.

And retailers, many of which have close ties to China from both the manufacturing and consumer sides, are unlikely to escape the changing economic landscape there.

Best Buy latest quarterly results delivered a rise of sales by 3.8% for their second quarter which was well ahead of Wall Street’s expectations and posted a better than expected profit.

Net income attributable to shareholders rose to $164 million, or 46 cents per share, in the second quarter ended August 1 from $146 million, or 42 cents per share, a year earlier.

Best Buy reported non-GAAP EPS of $0.49, up 16.7% year-over-year and $0.15 higher than analysts were expecting.

Domestic sales excluding newly opened or closed locations grew 3.8%.

On the back of several favorable macroeconomic developments in the U.S. ranging from faster job growth to rising home values, the electronics retailer continues to find success in selling pricey appliances and high-definition large screen TVs.

Best Buy CEO Hubert Joly today announced that the company plans to accelerate support for the Apple Watch by having the wearable device be sold in every one of its 1,050 retail locations across the United States “by the end of September” (via Fortune).

In the worldwide business, the company said it expected a revenue decline of about 30 percent because of foreign currency fluctuations and its brand consolidation efforts in Canada. Lower sales of low-margin tablets also improved profitability in the segment.

“As such, our outlook assumes that there will be no material changes in consumer spending in the third quarter”, she said. Analysts had forecast a decline of 6%.