(Reuters) - Best Buy Co Inc (BBY.N), the No. 1 U.S. electronics retailer, reported a better-than-expected rise in quarterly profit and same-store sales on Thursday, helped by higher online revenue and strong demand for TVs, home theaters and wearable devices.
The retailer’s forecast for full-year adjusted profit also beat analysts’ expectations, sending its shares up 7.5 percent to $43.50 in early trading, their highest in three years.
The Richfield, Minnesota-based company said sales at established stores rose 1.8 percent in the third quarter ended Oct. 29, topping the 1 percent rise analysts on average had expected, according to research firm Consensus Metrix.
Online revenue jumped 24.1 percent to $881 million, accounting for 9.8 percent of total revenue, as traffic increased and customers spent more per purchase. Online sales accounted for 8 percent of revenue in the third quarter of 2015.
Consumer electronics revenue rose 4.9 percent on a comparable store basis, while sales in the part of the business that sells laptops, tablets and mobile phones ticked up 1.6 percent, compared with a decline of 0.9 percent last year.
Sales of appliances, which have also been helped by the housing market recovery, rose 3 percent on a comparable store basis. However, that paled against last year’s increase of 16.4 percent, partly due to Samsung Electronics Co Ltd’s (005930.KS) recall of 2.8 million washing machines, analysts said.
Best Buy said the unavailability of some products due to recalls could drag down sales in the holiday shopping quarter by $200 million, to $13.4 billion-$13.6 billion.
Analysts on average had expected Best Buy to report sales of $13.7 billion in the current quarter, which includes January, according to Thomson Reuters I/B/E/S.
Best Buy also sold Samsung’s Galaxy Note 7 phones, whose production ended after they showed a tendency to catch fire.
“The Samsung issues will be somewhat of a drag on Q4,” Moody’s analyst Charles O‘Shea said.
“However ... Best Buy will be able to overcome these and have a strong holiday and overall fourth quarter, driven in large part by continuing online acceleration.”
Best Buy said it expects same-stores sales to rise or fall by 1 percent in the current quarter.
The company’s net income rose 55 percent to $194 million, or 61 cents per share.
Excluding certain items, Best Buy earned 62 cents per share, beating analysts’ average estimate of 47 cents, according to Thomson Reuters I/B/E/S. Net sales rose 1.4 percent to $8.95 billion, beating the average estimate of $8.85 billion.
Up to Wednesday’s close, Best Buy’s stock had risen about 35 percent this year.
Reporting by Gayathree Ganesan in Bengaluru; Additional reporting by Siddharth Cavale; Editing by Martina D'Couto and Sai Sachin Ravikumar