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The electronics retailer – one of the few traditional giants that flourish in the Amazonian era – said on Wednesday that sales in stores opened for at least a year had increased 3% in its last quarter compared to 2018 The expectations of Wall Street. Best Buy has recorded sales growth of at least 3% in each quarter for almost two years.
The profits of the company also exceeded expectations. Best buy (BBY) stocks jumped 16% early in the session.
CEO Hubert Joly told analysts Wednesday that Best Buy's "improved experience" in stores and online had seduced customers.
As Walmart (WMT), which announced revenue last week, Best Buy was boosted by strong consumer spending and low unemployment. Sales at Walmart's US stores opened at least a year in its last quarter, up 4.2% from last year. Best Buy and Walmart avoided Amazon's pressure by investing heavily in their stores and scaling up their online efforts.
Under Joly, Best Buy has invested money to make its stores a destination of choice for buyers and sellers Amazon (AMZN), Apple (AAPL)and Samsung.
The 1,000 Best Buy stores also act as warehouses, from which the company can quickly ship shipments to customers and retrieve their online pickup orders. Online sales of the company increased 9% in its last quarter. And nearly a quarter of its annual sales are done online.
In recent years, Best Buy has also focused on service, helping customers solve their technical problems. He has deployed In-Home Advisor, a home technical consulting service, and Total Tech Support, an annual subscription for on-demand help and repairs.
Last year, Best Buy acquired GreatCall, the maker of the Jitterbug mobile phone with big buttons for the elderly. The company now sells this product in its stores.
Joly told analysts that these programs help Best Buy differentiate itself from its competitors. Best Buy sales in its service unit grew by almost 14% during the holidays compared to last year.
Clothing, home appliances, smart home appliances and gaming products were the best-selling categories for Best Buy during the holidays. Appliances were a good thing: sales in this category rose 8.5% during the holidays.
Apple's iPhone problems have however affected Best Buy. The tech company's iPhone turnover has dropped 15% during the holidays compared to last year. This weighed on Best Buy, as its telephone division slowed down.
In 2019, Best Buy plans to expand its business in health technologies for sleep and fitness. Joly added that the company thought digital health was a "huge opportunity".
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