Best Buy (BBY) shares jumped 15% in premarket trading on Thursday after the electronics retailer reported a surprise increase in U.S. sales, buoyed by demand for Nintendo’s new Switch game console.
Comparable U.S. sales, which Best Buy itself and Wall Street had each forecast would decline, instead rose 1.4%. Companywide, they rose 1.6%. Last week, Target (TGT) also reported a welcome boost to its electronics business from Switch.
“Our revenue was higher due to strong performance in gaming,” Best Buy Chief Executive Officer Hubert Joly said in a statement.
The company also expects more gains this quarter: Best Buy forecast comparable-sales will rise 1.5% to 2.5%.
Joly has reinvigorated Best Buy in recent years with cost cuts and by reinventing stores that showcase specific brands and services. The next phase of Best Buy’s renaissance under his watch will involve an expansion of Best Buy’s digital and international businesses, as well as services such as in-home electronics consultations.
In addition, Best Buy’s appliance sales could benefit from the recent bankruptcy of one-time rival hhgregg.
“We expect Best Buy to continue to perform at a high level across multiple categories, with appliances likely to be one of the bright spots given market dynamics,” Moody’s retail analyst Charlie O’Shea wrote in a research note.
