The electronics retailer Best Buy saw its shares rise 7.2% to $43.37 in pre-market trading after it reported better-than-expected sales and profit during the past quarter, as it sees online sales grow amid higher demand for consumer electronics, computers and mobile phones.
The company said revenue had ticked up from the same three-month period a year earlier to $8.94bn, beating Wall Street’s forecast of $8.84bn. That translated to diluted earnings per share of 47 cents on net earnings of $194mln, an improvement over the year-ago period and better than analysts’ predictions.
Best Buy said that it saw robust double-digit revenue growth in its consumer electronics, computers and mobile phones categories. Its comparable sales grew 1.8% despite the closure of 14 large format and 23 Best Buy Mobile stores, thanks in part to a 24% increase in domestic revenue from online customers.
Meanwhile, Walmart demonstrated the success of a major old economy brand resetting itself in the digital age as the giant said its ecommerce sales rose 20.6% in the third quarter, in a sign that its strategy to play catch up in capturing online growth is starting to pay off.
The acceleration in growth from the second quarter came as the company this year has made several key investments, including forming a partnership with China’s JD.com, acquiring marketplace startup Jet.com and rolling out a mobile payments system across its US stores. The world’s largest retailer by sales had been criticised for its slow growth in ecommerce.
In the third quarter, Walmart’s revenue rose 0.7% to $118.2bn, and excluding currency fluctuations rose 2.5%. Earnings dropped 4.9% to 98 cents a share, beating analysts’ forecasts for 96 cents a share, according to a Bloomberg consensus estimate.
Its US operations continued to expand with comparable sales increasing 1.2%, helped by a rise in traffic of 0.7%. The company’s Neighbourhood Market supermarkets increased 5.2%.
However, investors have been unimpressed with the figures so far, with pre-market trading pushing Walmart’s shares down 3.2% to $69.10.
Story by ProactiveInvestors