Best Buy Co. Inc. shares moved to a new level Tuesday, nudging above $40 for the first time in nearly three years.
With a closing quote of $40.62, stock in the Richfield-based retailer has basically doubled since Hubert Joly took over as CEO of the beleaguered company in September 2012. Shares traded as low as $11.29 in late December.
Tuesday's upward move was fueled in part by increasing confidence on Wall Street that the company's turnaround is gaining traction. Best Buy's 2.6 percent gain came as broader markets dropped nearly 1 percent amid growing fears of a possible government default.
One analyst reported Tuesday that comparable-store sales, earnings per share and market share have all improved during the third quarter.
Cleveland Research analyst Daryl Boehringer said in a research note that same-store sales are up 2.5 percent from 1 percent midway through the quarter while earnings per share estimates rose from 12 cents to 17.
Best Buy is "seeing improved market share in key categories" and "benefits from store redesigns," which gives a larger footprint to higher-margin products, Boehringer wrote.
Edward Jones & Co. analyst Brian Yarbrough said in an interview that Best Buy's cost-cutting efforts are starting to bear fruit.
"They haven't shown sales growth yet but cost-cutting has delivered," Yarbrough said. "We've also seen evidence of improved customer service and a reallocation of space within the stores to emphasize tablets and appliances and mobile phones and give less space to [lower-end] items like gaming and DVDs."
