Daily Management Review

Best Buy Announces A Surprising Increment In Quarter Sales


08/31/2015


The increment of Best Buy’s sale figures surprised the analysts.



Best Buy Announces A Surprising Increment In Quarter Sales
Thanks to the increasing demand of mobile phones, television sets and other such electronic appliances, the “biggest” electronics chain owner of the United States, Best Buy Co Inc saw an “unexpected increase” in its quarterly sales figures, reports the company.
 
During the pre-market trade on Tuesday, the company recovered “11.3 percent” of its shares out of “24 percent” as their figures jumped after the loss that occurred during the last six months. Consequently, in the closing second quarter which ended on the 1st August 2015, the revenue of Best Buy Co Inc rose by “0.8 percent”. However, the analysts were quite surprised at this trend they had expected to see a fall of shares by “2 percent on average”.
 
The strategy of Best Buy which sought to boost its profit levels, increase its margins along with giving a tougher competition to “online and big-box retailers”, caused the company management to streamline its functioning structure, whereby closing some stores and cutting down on jobs. The improvement brought over the “job market” along with the lower “fuel prices”, enabled more customers to invest on television sets and other such “big-ticket items”, as Reuters terms them.
 
In an attempt to concentrate its operational field, Best Buy “exited” the Chinese market whereby consolidating Canadian supplies which leaves the company “largely dependent on U.S. sales”. As luck would have it, the U.S. sales of Best Buy saw a rise in the sales figures for the fourth quarter in a row, which has contributed almost “93 percent of total sales”.
 
The growing demand for electronic appliances combined with “higher mobile prices”, resulted in a sale increase of “2.7 percent” in the ‘same-store’ of the region. According to Reuters report:
“Revenue rose to $8.53 billion in the quarter, compared with the average analyst estimate of $8.29 billion.

“Net income attributable to shareholders rose to $164 million, or 46 cents per share, in the second from $146 million, or 42 cents per share, a year earlier”.
 
The analyst estimations of “34 cents” per share were beaten by “49 cents” through a selection of excluded items. Moreover, prior to the opening of Tuesday, the company traded its share at “$32.80” as by the closing figures obtained on Monday, the stocks had “fallen 24 percent this year”.
 
 
Source(s):
http://www.reuters.com/article/2015/08/25/us-bestbuy-results-idUSKCN0QU1B420150825







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