Shares in the largest US consumer electronics retailer Best Buy have leapt ahead of the opening bell in New York after posting a rare rise in sales.
An hour ahead of the open the company's shares were 16 per cent higher at $38.18 in pre-market trading.
The boost to shares came from an up-tick in forecasts for the third quarter. Best Buy is now expecting revenue of between $8.8bn and $8.9bn in the current quarter, with profit of 43-47 cents per share.
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Analysts polled by Thompson Reuters were expecting an average of $8.77bn in revenue and a profit of 45 cents per share.
For the second quarter investors have been cheered by sales at established stores rising 0.8 per cent, compared to average analyst expectations of a 0.60 per cent fall.
Net income rose to $198m, or 61 cents per share, in the quarter, from $164m a year earlier, while revenue slightly rose to $8.53bn, ending a three quarter run of declining sales.
Best Buy chairman and chief executive Hubert Joly said:
Our teams delivered a strong second quarter, with better-than-expected revenue and profitability in both our domestic and international businesses. We also continued to deliver cost savings and drive efficiencies in the business, a discipline that is critical to our ability to invest in our future.
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Former Best Buy chief financial officer Sharon McCollam left the company in June, with Corie Barry, who was previously chief strategic growth officer and a 16-year veteran of Best Buy, stepping into the role.
As it relates to our full year financial outlook, we are reaffirming our expectation of approximately flat revenue and raising our full year non-GAAP operating income outlook. We continue to expect the slight revenue decline in the first half to be offset by slight growth in the back half and in light of our first half performance.
Earlier this month US retail sales were found to have flat-lined in July, with factory prices defying expectations to fall into negative territory.
Ahead of the retail data US GDP fell far short of expectations in the second quarter coming in at 1.2 per cent – far below the forecast 2.5 per cent.
To make things worse, US GDP growth in the first quarter was also revised downwards from 1.1 per cent to 0.8 per cent. Consumer spending – which makes up most of US GDP – grew at 4.2 per cent.
A poll of economists by Bloomberg had expected GDP in the world's largest economy to be 2.5 per cent.