What's the difference between 70s disco diva France Joli and France's Hubert Joly? Well, one's art form is coming back from the dead.
Then again, both are belting out a pretty compelling rendition of "Come to Me" these days, as Best Buy's (NYSE:BBY) CEO is making some serious headway in getting his consumer electronics chain turned around.
Shares of Best Buy opened 11% higher this morning after posting better-than-expected financials. The retailer's fiscal second quarter was stunning in light of Wall Street's projections. Analysts were targeting Best Buy to earn less than half of the $0.26 a share it posted a year ago, and it came through with an adjusted profit of $0.32 a share. Revenue slipped less than 1%, to $9.3 billion, well above the $9.1 billion that the pros were eyeing.
Keep in mind that the report is far from perfect. Best Buy is holding up better when pitted against expectations, but it still has a long way to go.
For starters, same-store sales remain negative. Domestic same-store sales slipped 0.4%, and that was after closing dozens of underperforming stores last spring. That figure also includes the 10.5% increase in comparable online sales, as the chain tacks on its BestBuy.com revenue to store-level comps.
It also should be pointed out that online rival Amazon.com's (NASDAQ:AMZN) North American sales rose nearly 30% in its most recently quarter, so it's not as if Best Buy's Web-based initiatives are eating into the dot-com bellwether's business.
However, Joly is certainly living up his billing as a turnaround expect by shaving costs to the point where the retailer can offer more competitive prices, yet still grow adjusted profitability.
Best Buy shares hit a two-year high today, and Best Buy isn't generating the kind of sales or profitability that it was two years ago. However, the brand itself is getting turned around. There was a feeling that it was all downhill two years ago, and at least there's hope that Joly may be the right person to turn things around here.
It will be great to see a time when Best Buy is actually growing at the individual store level -- and an improving economy may deliver that -- but for now, it's a welcome surprise that Best Buy has outperformed gloomy expectations for the third consecutive quarter.
It's time hit the dance floor with those platform shoes. Best Buy's getting some serious lift here.