Unemployment has fluttered around the 10% mark for the better part of two years. Millions of Americans have been laid-off with no chance of getting a job. Reports have been released to mention 1 in 7 Americans are now living in poverty. The down turn in the economy is similar to an unwinnable war.
The down turn has forced numerous companies to report sales decreases, profit decreases, or worse, go out business completely. Fortunately, not all companies are built the same.
Best Buy, the specialty retailer of consumer electronics, has set the bar higher than most major retailers. In possession of 19% of the consumer electronics market, Best Buy was set to release their earnings in hopes of a positive response to a negative economy.
In true Best Buy fashion, results were delivered. For the second quarter, Best Buy posted a 60% increase in net profit. According to CEO Brian Dunn, Best Buy shoppers are still hesitant in their spending, but feel customer spending will “rotate” during the back half of the year. During the holiday season, shoppers generally seek out niche items.
Analysts were predicting results from Best Buy in the range of 44 cents per share instead of the 60 cents per share reported. On top of a net income boost, Best Buy posted a 3% revenue boost as well.
What drove such high numbers for Best Buy? The item which helped maximize profits was Best Buy Mobile. With more cell phones this year, accessories, services, and protection plans were in high demand.
For the holidays, executives expect to see a boost is select categories. With the rise of 3-D gaming, Best Buy will be ready with 3-D televisions. Categories such as mobile accessories, e-readers, gaming products, as well as the iPad will the sales drives for the holidays.
With such positive results, Best Buy has raised its expectations from $3.55 per share to $3.70 per share. For the entire year, Best Buy expects growth of 5%. This figure will equate to sales of $52 million.