The parent of Burnaby-based Best Buy Canada reported its first quarterly profit in a year on August 20 as the consumer electronics giant beat Wall Street estimates for both profit and revenue.
Minneapolis-based Best Buy Co. Inc. stock (NYSE:BBY) soared 13.24% to US$34.80, which is its highest price since January 2011.
The company cited “ongoing competitive pressure in Canada” as part of the reason why its international division suffered a 1.8% comparable store sales dip, which was three times the 0.6% comparable store sales change chain-wide.
About 84% of the chain’s revenue comes from the U.S. with the remainder coming largely from Canada but also China and Mexico.
Best Buy had also operated in Europe as part of a joint venture but sold its stake in that company in April to partner Carphone Warehouse for a fraction of the US$2.5 billion investment that Best Buy made in 2008.
The company did not break out Canadian sales, but it reported that international sales overall slipped 2.9% to $1.491 billion in the quarter that ended August 4.
In contrast, Best Buy’s U.S. division generated $7.809 billion in the quarter, up less than 0.1%.
Changes in the past year include a new CEO, turnaround expert Hubert Joly, who joined last fall. Joly then slashed layers of management, chopped thousands of jobs and closed underperforming stores, including 15 large format stores in Canada.
He also appointed Ron Wilson president of Best Buy Canada.
Quarterly profit rose more than 2,100% to US$266 million, up from US$12 million a year ago. Sales fell 0.4% to US$9.3 billion in the quarter, down from US$9.339 billion in the same quarter a year ago.
