Best Buy beats Street, swings to Q3 profit
Minneapolis — Best Buy reported net income of $54 million during the third quarter amid tight cost controls, compared to a net loss of $10 million during the same period a year earlier, beating analyst predictions for a more modest net income. The chain also warned that its margins may take a hit this quarter in what is shaping up an extremely promotional environment.
The chain posted revenue of $9.36 billion, which was flat with last year and below analyst expectations of $9.37 billion.
Same-store sales rose 0.3%, including a 1.7% increase in the U.S. and 6.4% decline internationally. Online sales rose 15.1% during the quarter.
Best Buy said it has cut costs, increased employee training and matched competitors’ online prices to sustain store traffic, but increased markdowns and store hours during the holiday season may impact fourth quarter results. Annualized costs have been reduced $505 million in the past 12 months, contributing to earnings.
“Our third quarter top-line results make it clear that our focus on delivering our unique customer promises is starting to pay off,” said Hubert Joly, president and CEO of Best Buy. ”It is also clear that our efforts to control costs and to bring greater efficiency to our operations are improving our profitability. While we remain mindful of the fact that we still have a long way to go, we are pleased with the progress of our Renew Blue transformation efforts.”
Home Depot raises guidance on strong Q3
Atlanta — The Home Depot reported net earnings of $1.4 billion for the third quarter of fiscal 2013, up 48% from $948 million in the same quarter of the prior fiscal year. The retailer raised its 2013 forecast for the third time this year amid rising home prices.
"Our third quarter results reflect the continuing improvement in the housing market and our solid operational performance," said Frank Blake, chairman & CEO.
Other results in a strong quarter included sales of $19.5 billion, a 7% increase from $18.1 billion, and a same-store sales increase of 7.4% (8.2% for U.S. stores).
Home Depot partially attributed its improved net earnings to the elimination of a $165 million charge related to the closure of seven stores in China a year earlier, as well as a rebounding housing market. Net earnings beat Wall Street expectations. Based on these results, Home Depot raised its fiscal 2013 sales guidance and now expects sales to be up approximately 5.6% Same-store sales, on a 52-week like for like basis, are expected to be up approximately 7% for the year.
Urban Outfitters Q3 profit up 18%
Philadelphia — Urban Outfitters’ third quarter profit increased 18%, helped by strong results at its Anthropologie and Free People divisions. The company’s quarterly earnings per share and sales both in above estimates.
Urban Outfitters’ net income totaled $70.2 million, up 18% from $59.5 million.
Net sales equaled about $774 million, a 12% increase from $692.9 million. Same-store segment net sales, which include the direct-to-consumer channel, increased 7%.
Same-store retail segment net sales increased 30% at Free People and 13% at Anthropologie and decreased 1% at Urban Outfitters. Wholesale segment net sales rose 21%. Revenue and earnings exceeded consensus estimates.
"Fueled by strong results at our Anthropologie and Free People brands, I am pleased to announce that the company delivered record third quarter sales and operating profits," said Richard A. Hayne, CEO. "Despite this solid performance we remain cautious about the fourth quarter given the likelihood of a highly promotional environment and this year’s challenging holiday calendar.”
During the quarter the company opened nine new outlets. In the fourth quarter the company plans to open 10 new stores, including two Anthropologie stores, four Free People stores and four Urban Outfitters stores. This will bring the count of new stores opened during fiscal 2014 to 36, including 15 Urban Outfitters stores, 13 Free People stores and eight Anthropologie stores.