Best Buy shines in Q3 but Samsung recall may dent holiday

Best Buy Co.’s sales and profits in the third quarter topped forecasts, but the retailer warned that the recall of a Samsung smartphone is likely to impact its holiday sales.



Best Buy’s profit jumped 55% to $194 million, up from $125 million in the same period a year ago. Adjusted for one-time expenses, it earned 62 cents a share, which was higher than the 47 cents analysts were expecting.



Total revenue was $8.94 billion, up slightly from a year ago. Domestic revenue totaled $8.2 billion, up 1.3% over last year, driven by same-store sales growth of 1.8%.



Domestic online sales rose 24.1%.



Similar to other consumer electronics retailers, Best Buy is being challenged by various high-tech product recalls, most notably Samsung Electronics Co.'s Galaxy Note 7 phone. Best Buy said the recall would lower fourth-quarter revenue by $200 million, prompting the company to lower its forecast estimate for the holiday season quarter to a range of between 1% up and 1% down.



“From a revenue standpoint, we are excited by the rate of technology innovation, the quality of our assortment and our ability to execute,” stated Corie Barry, CFO. "That being said, we have updated our original expectations to incorporate the impact of recent product recalls and the fact that certain products will simply not be available for sale during our fourth quarter.”