Don’t call it a comeback: Best Buy stock soars after retailer reports $266M profit

Not long ago, it seemed as if Best Buy was destined for the same fate as Circuit City. Profits were down, with many customers using the big box chain as a glorified showroom before making their actual purchases through Amazon. But today the retailer surprised Wall Street with stronger than expected earnings, turning its first quarterly profit in a year. Best Buy’s net profits surged to $266 million, up from a meager $12 million in the same quarter one year ago. It’s obviously too early to say whether the chain has decisively turned things around, but CEO Hubert Joly has managed a small victory with today’s financial report.

Analysts are attributing the successes to cost-cutting measures Joly has taken; since he came into the role, Best Buy has abandoned the European market, thinned out its management structure, and closed down some of its worst-performing stores. Perhaps more importantly, it has also taken strides to hold onto consumers by instituting an aggressive price match policy and opening “boutique” store-within-store shops for Samsung and, more recently, Microsoft.