Demand for headphones, computers, appliances and mobile phones helped drive strong holiday sales for Best Buy.
The Richfield-based retailer's fourth-quarter results, which included a 3.4% growth in comparable sales in the U.S., were better than expected on the top and bottom lines.
Going forward, the company put out a muted, but still positive, guidance for the coming year, calling for comparable sales growth in range of flat to 2%, to account for potential disruptions to its supply chain due to the coronavirus outbreak.
"Based on what we know today, we have assumed the majority of the impacts occur in the first half of the year," Matt Bilunas, Best Buy's chief financial officer, said in a statement. "Therefore, we view this as a relatively short-term disruption that does not impact our long-term strategy and initiatives."
Analysts were expecting Best Buy to be conservative with its guidance given concerns about the coronavirus outbreak, which has shut down or delayed production in many parts of China, the largest source of consumer electronics products.
At the same time, the outlook for sales of consumer electronics in the U.S. is fairly healthy for 2020 with the NPD Group forecasting 5% growth in the category this year before coronavirus became a major issue.
This week, concerns over the spread and impact of coronavirus took a toll on many stocks, including that of Best Buy's with its shares tumbling 9% so far this week.
Best Buy's shares were up nearly 3% this morning in pre-market trading after posting its fourth-quarter results and outlook for the year.
During the fourth quarter, Best Buy's profit rose 1.4% to $745 million. When adjusted for various items, it earned $2.90 a share, which was better than the $2.75 analysts had been expecting.
Its total revenue rose 2.7% to $15.06 billion.
"We offered compelling holiday deals that resonated with customers and provided a seamless shopping experience, great inventory availability and fast and free delivery," CEO Corie Barry said in a statement.
During the holidays, Best Buy rolled out free next-day delivery on thousands of items as well as dozens of new pickup locations for online orders inside CVS and UPS stores across New York City. It has also begun adding curbside pickup options to some of its stores around the country,
Earlier this month, Best Buy's board also reaffirmed its support of Barry following an investigation into her personal conduct.
