The stock jumped 7.6 percent Thursday, helping the retailer overtake Netflix as the best-performing stock in the index.
Best Buy Co.’s 7.6 percent increase in share price Thursday was one of its five best market moves in a year of mostly good ones.
The electronics retailer’s stock has risen about 245 percent in 2013. And with Thursday’s gain, Best Buy became the best-performing stock in the S&P 500 index, narrowly edging Netflix Inc.
Best Buy’s shares rose $2.74 per share to close at $39. It was their biggest one-day move since a 13.2 percent jump on Aug. 20.
The stock shot upward at the opening Thursday and traded as high as $39.28 even before the Richfield-based company had confirmed a new promotion on Apple’s iPhones that was rumored earlier this week. Investors in part perceive that Best Buy is experiencing improving fundamentals and that shoppers’ appetites for consumer electronics will be higher than for apparel and other goods during the holiday season.
On Wednesday, David Schick, retail analyst at Stifel Nicolaus & Co., highlighted Best Buy in the firm’s monthly report on trends in consumer spending. The report, based on a survey of 600 families, showed several positive trends for Best Buy.
“Best Buy has become more effective at gaining share within its category than it has been in years,” Schick said in an interview Thursday.
Stifel’s report also showed that consumer demand for new TVs and other electronics is on the rise. “If Best Buy gets better at execution, better at gaining share and then the business of television gets better … that’s a potentially meaningful one-two punch,” Schick said.
The report alone doesn’t explain Thursday’s jump in Best Buy shares. The firm also benefited from the broader market’s change in sentiment, driven by perceptions that the debt ceiling confrontation in Washington may be averted or delayed.
The S&P 500 index had its second-best day of the year, with 488 of its stocks rising.
Meanwhile, Best Buy confirmed Thursday that it will offer consumers a guaranteed $100 in trade-in credit for any working smartphone toward the purchase of the iPhone 5c or iPhone 5s.
The offer only runs next week and customers must be eligible for an upgrade and activate the new iPhone on a two-year contract with AT&T, Sprint or Verizon.
Patrick Kennedy • 612-673-7926