Best Buy Co. Inc. on Tuesday reported strong third-quarter earnings and boosted its full-year guidance, heading into the heart of the holiday shopping season.
The company's shares got off to a rocky start, but rebounded by midday. Despite near-record sales gains, shares of many retailers took a hit, including those at Target and Kohl's, as investors worried about potential erosions in profits over free-shipping deals and other investments to speed up delivery and streamline the shopping experience online and in-stores.
Stocks across the market were down, led by technology companies.
At Best Buy, same-store sales were up 4.3 percent for the third quarter, higher than what analysts had forecast. But the growth was slower than previous quarters.
Strong sales of mobile phones, gaming and appliances helped drive a quarter in which profits soared 16 percent.
"We are energized by our continued momentum," said CEO Hubert Joly.
He said the company is ready for the holiday season, which officially kicks off this week although promotions and discounts have been going on for a few weeks.
With consumer confidence at a point not seen in decades, the Richfield-based electronics chain increased its guidance. It now expects comparable sales to increase 4 to 5 percent for the year, leading to revenue between $42.5 billion and $42.9 billion. Profits are forecast to rise 15 to 17 percent.
