Best Buy shares jump on holiday results
NEW YORK (AP) -- Shares of Best Buy Co. jumped on Friday after the electronics chain showed signs of starting to reverse declining sales during the critical holiday selling season, a better-than-expected result.
Shares rose 16.4 percent to $14.21.
Best Buy has been facing tough competition from discounters and online retailers, as people browse electronics in stores and then go home to buy them more cheaply online, a practice known as "showrooming." To combat this, it has instituted a cost-cutting program, invested in more employee training and put an online price matching policy in place during the key holiday period of November and December. The holiday quarter accounted for about a third of Best Buy's revenue last year.
The chain said that revenue at stores open at least a year fell 1.4 percent for the nine weeks ended Jan. 5. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
The company's U.S. performance was flat. While this was slightly below the 0.3 percent increase Best Buy reported a year ago, President and CEO Hubert Joly said in a statement that it was an better than the past several quarters.