Best Buy forecasts strong holiday-quarter profit; shares jump 5%

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© Reuters. A sign marks a Best Buy store in Salem© Reuters. A sign marks a Best Buy store in Salem

(Reuters) – Best Buy Co Inc (N:) forecast fourth-quarter profit above Wall Street estimates on Tuesday, pointing to hopes of strong demand in the crucial holiday shopping season and sending the shares of the biggest U.S. tech retailer up nearly 5%.

Big retailers Target Corp (N:) and Walmart Inc (N:) have also forecast a strong holiday quarter, which can account for as much as 40% of annual sales for U.S. retailers.

Best Buy said it expected fourth-quarter adjusted earnings of $2.65 to $2.75 per share, largely above Wall Street expectation of $2.65.

The company said same-store sales in the fourth quarter was expected to rise between 0.5% and 3%, the mid-point of which is above estimates of a 1.4% increase.

Best Buy’s third-quarter revenue and sales beat market expectations as repair and tech support services as well as new financing and leasing options helped pull more shoppers into its stores.

Overall same-store sales rose 1.7% in the quarter ended Nov. 2, beating analysts’ average estimate of a 1.3% increase, according to IBES data from Refinitiv.

Revenue rose to 1.8% to $9.76 billion, beating expectations of $9.70 billion.

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