Best Buy Co. Inc. said Tuesday its third-quarter profit rose 9 percent as customers bought more expensive products, but results were below expectations as the nation’s biggest consumer electronics retailer made greater use of promotions to move merchandise.
Net income for the quarter ended Nov. 25 totaled $150 million, or 31 cents per share, compared with net income of $138 million, or 28 cents per share, a year ago.
Revenue grew 16 percent to $8.47 billion, from $7.33 billion last year.
The net income figure fell below the expectations of analysts polled by Thomson Financial, who expected earnings of 35 cents per share. Revenue was just above forecasts of $8.42 billion.
Same-store sales, or sales in stores open at least 14 months, a key measure of industry performance, rose 4.8 percent, as customers spent more on items such as flat-screen televisions and notebook computers.
Brad Anderson, vice chairman and chief executive, said a “very competitive climate” put pressure on margins and led to earnings coming below management’s expectations. Competitors such as Wal-Mart Stores Inc. lowered prices on high-ticket items during the Thanksgiving shopping weekend, forcing Best Buy to do the same.
The company affirmed annual earnings guidance between $2.65 to $2.80 per share. Analysts expect earnings of $2.81 per share. It sees revenue growth “approaching” 16 percent for the year, implying revenue approaching $35.79 billion compared with revenue of $30.85 last year. Analysts expect revenue of $35.34 billion.
The company expects same-store sales growth for the year to be between 4 and 5 percent.