Minneapolis Best Buy Co. said Tuesday its third-quarter profit more than quadrupled, but warned that profits will be lower than expected in the fourth quarter.
Profit for the quarter ended Nov. 28, rose to $227 million, from $52 million in the year-ago period, beating Wall Street estimates. Last year's results included a charge related to the decline in value in its investment in U.K. retailer Carphone Warehouse.
Revenue rose 5% to $12.02 billion, from $11.5 billion last year, ahead of the $11.98 billion analysts predicted. The increase includes a 9% rise in domestic sales, to $8.9 billion, and a 6% decline in international sales, to $3.1 billion. Revenues were aided by the addition of 127 net new stores in the past 12 months.
Same-store sales overall for the quarter edged up 1.7%. They gained 4.6% in the United States as both traffic and the amount shoppers spend per transaction improved.
"While a large portion of the key holiday selling season remains ahead and consumers are clearly being very conscious of what they buy and from whom they make purchases, the trends we experienced in the third quarter continue to provide encouragement about what lies ahead in the balance of the fiscal year," said Jim Muehlbauer, Best Buy's executive VP finance and CFO.
Best Buy is forecasting that it will be selling more notebook computers and lower-priced TVs during the balance of the holiday shopping season, which have slimmer profit margins and will likely lead to lower-than-expected fourth-quarter gross margin.