Shares of Best Buy Co. Inc. (NYSE:BBY) jumped nearly 10 percent Thursday morning after the consumer electronics retailer's profit and revenue beat Wall Street forecasts last quarter, boosted by sales of large-screen televisions, mobile phones and appliances. Best Buy’s stock leaped 9.5 percent to as high as $37.60 in pre-market trading.
The Richfield, Minnesota, company said same-store sales, the key retail metric, rose 0.6 percent, topping estimates for a 0.1 percent increase. Meanwhile, the company’s online revenue increased 5.3 percent to $673 million.
“We continued to take advantage of strong product cycles in large-screen televisions and iconic mobile phones and continued growth in the major appliance category,” Hubert Joly, Best Buy president and CEO, said in a statement Thursday.
For the quarter ended May 2, 2015, Best Buy reported net income of $129 million, or 36 cents per share, on revenue of $8.56 billion, compared with a profit of $461 million, or $1.31 per share, on sales of $9.04 billion during the same period a year ago.
Wall Street had expected the company to report first-quarter net income of $73.29 million, or 18 cents per share, on revenue of $8.47 billion, according to analysts polled by Thomson Reuters.
Best Buy reported $9.04 billion in revenue in the first quarter of 2014, which includes revenue generated by Five Star, its China division, which the company has since sold. Excluding Five Star, the company turned in revenue of $8.56 billion in the first quarter of 2015, compared with $8.64 billion in sales during the same period in 2014. The difference in net earnings reflects a one-time tax credit and restructuring charges during the first-quarter of 2014.
Best Buy expects international revenue to drop 30 percent to 35 percent this year due to store closures in Canada, along with the effects of foreign exchange rates. The retailer announced in March it plans to close 66 stores and consolidate operations in Canada, its second-largest market. The move will cut 500 full-time and 1,000 part-time jobs.
The decision will also cut into Best Buy’s earnings this year, as it will cost the company $191 million, compared with previous expectations of $200 million to $280 million in restructuring charges. The company said it expects to incur additional charges of $10 million to $90 million related to the closures.
Shares of Best Buy have lost 13 percent this year, as of the close of trading Wednesday.