Best Buy’s stock rose sharply on Thursday after the consumer electronics retailer reported higher-than-expected earnings and raised its fiscal year profit guidance, according to CNBC.
The company now anticipates full-year adjusted earnings per share between $6.10 and $6.35, an increase from the previous range of $5.75 to $6.20.
Despite raising its profit outlook, Best Buy lowered the top end of its guidance ranges for full-year revenue and comparable sales. TThe changes come as the company navigates a difficult retail environment characterized by lower consumer demand and the residual effects of a two-year sales slump.
For the quarter ending August 3, Best Buy reported earnings per share of $1.34, exceeding Wall Street’s expectation of $1.16, according to an LSEG analyst survey. Revenue for the quarter was $9.29 billion, slightly higher than the expected $9.24 billion, but down from $9.58 billion during the same period last year.
The retailer’s net income for the quarter was $291 million, or $1.34 per share, up from $274 million, or $1.25 per share, a year earlier. However, comparable sales fell 2.3%, which was an improvement over the 6.2% drop recorded the previous year.
In response to the sales slump, Best Buy has implemented a number of turnaround strategies, including increased marketing efforts and stronger sales teams in critical areas such as computing, appliances, and home theater. The company is also confident in capitalizing on new tech product launches, such as Apple’s latest iPads and Microsoft’s AI-enabled laptops, to boost future sales.
During the earnings call, CEO Corie Barry stressed the importance of consumer demand for technology upgrades and replacements, pointing to the company’s success in meeting this demand. She also emphasized the potential for artificial intelligence to increase sales across multiple categories in the coming years.
As of Thursday morning, Best Buy’s stock had risen more than 14% in premarket trading, reflecting investor confidence in the company’s improved financial prospects.
