When a company puts "better-than-expected" in the headline of its earnings release, that's usually a very good sign. Best Buy (NYSE:BBY) did exactly that in its Q3 release, which gives shareholders a reason to cheer.
Best Buy reported GAAP diluted earnings per share from continuing operations of $0.60, an increase of 62% from $0.37 in the same period last year. The company also saw a slight rise in overall sales, a similarly small uptick in domestic sales, and a 1.8% improvement in domestic same-store sales. Perhaps most importantly, its United States online sales grew by 24%.
Those were encouraging numbers that suggest the company's turnaround efforts, which involve careful cost management, have been effective. Sales have stabilized and turned back to growth, and CEO Hubert Joly's plan seems to be working. That was enough to send its stock from a November 1 opening of $38.93 to a November 30 close of $45.70, a 17.3% change, according to data provided by S&P Global Market Intelligence.
Best Buy has been one of the more stunning comebacks in recent history. The company looked like it would be a casualty of the digital era, but it has fought its way back to relevance under Joly, who took a bit of a victory lap in his remarks in the earnings release:
We are pleased to report today growth on both our top and bottom lines. We are excited by the continued product innovation we are seeing, the role we play for customers, the growth opportunities in front of us, the quality of our execution and the strength of our financial performance.
These are encouraging numbers, but big-box retailers are judged by Q4, not Q3. Joly seemed to think his company is ready for that challenge:
Looking ahead, our teams are ready to execute our plan for the holiday season. To win holiday and deliver on this promise, we have created an exciting assortment of great and competitively priced products, and we have mobilized our assets, including our leading-edge digital capabilities, fast and free shipping across the entire site during holiday, and of course our knowledgeable Blue Shirts and Geek Squad agents who are here to provide compelling in-store experiences and in-home services.
That's a wordy way for the CEO to say he thinks Q4 will deliver. If that happens, it's probably time to stop talking about Best Buy's comeback and begin focusing on its future growth prospects.