Best Buy sales rise in quarter
Best Buy posted strong sales of mobile phones, appliances, and smart computing products as it showed in its financial results that store chains can still thrive as shoppers buy more online.
The nation’s largest consumer electronic was also buoyed by stronger consumer confidence in reporting first-quarter revenue and profits that beat Wall Street estimates. Sales at established stores rose 7.1 percent.
Still, Best Buy shares fell nearly 7 percent Thursday as investors were disappointed that the company didn’t raise its full-year financial outlook.
Only a few years ago, naysayers were writing Best Buy’s obituary. But the Minneapolis-based company has surprised investors with its resilience.
Best Buy has improved the store experience, allowing shoppers to test new technology. It’s invested in price matching and offers speedier delivery options.
It’s also been expanding its tech support services, hoping to deepen its relationship with shoppers. That includes a free service in big cities where salespeople visit customers at home to make recommendations on TVs, setup and more. It also just launched a service that costs $199.99 a year that offers unlimited Geek Squad technical support and many other services.
And it’s even joined with Amazon to let the online leader sell its voice-controlled TVs at its stores.
CEO Hubert Joly said Best Buy is also benefiting from the woes of retailers like Sears Holdings Corp., particularly when it comes to major appliances.
“Today’s robust results from Best Buy serve as a reminder that with focus and effort it is possible for any retailer to succeed against Amazon and other online players,” wrote Neil Saunders, managing director of GlobalData Retail in a note.
Mortgage rates rise to seven-year highs
Long-term U.S. mortgage rates rose this week, continuing at their highest levels in seven years amid the peak home buying season.
Mortgage buyer Freddie Mac said Thursday the average rate on 30-year, fixed-rate mortgages was 4.66 percent, up from 4.61 percent last week. Pushing toward the significant 5 percent level, the new average benchmark rate was the highest since May 5, 2011. By contrast, the 30-year rate averaged 3.95 percent a year ago.
The average rate on 15-year, fixed-rate loans increased to 4.15 percent from 4.08 percent last week.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.
The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. The fees on 30-year and 15-year fixed-rate mortgages were both unchanged at 0.4 percent.
The average rate for five-year adjustable-rate mortgages rose to 3.87 percent from 3.82 percent last week. The fee remained at 0.3 percent.
Gap profit misses Street estimates
Gap Inc. says its first-quarter profit missed forecasts, but revenue beat estimates.
The San Francisco-based clothing chain earned $164 million, or 42 cents per share, on revenue of $3.78 billion
Analysts expected a quarterly profit of 45 cents and revenue of $3.61 billion, according to Zacks Investment Research.
Sales in existing stores, a key retail metric, rose 1 percent during the quarter. But Looking ahead, Gap says it still expects full-year earnings to be $2.55 to $2.70 per share.
Delta to restart flights to Mumbai
Delta Air Lines said it plans to restart nonstop flights from the United States to Mumbai next year.
Atlanta-based Delta made the announcement in the wake of U.S. agreements reached earlier this year with Qatar and the United Arab Emirates.
The agreements with Qatar and the U.A.E. were aimed at addressing concerns Delta, United and American had raised about an un-level playing field with foreign carriers they say are receiving subsidies from their governments.
Delta said the India market has been “long impacted by government-subsidized Middle Eastern airlines.”
“The move will mark a return to India for Delta, which was forced to exit the market after subsidized state-owned airlines made service economically unviable,” Delta said in a written statement.
Plans for the new flights are subject to government approval, and Delta said it will announce details on the service later this year. Delta said it also plans to expand its “code-share” marketing partnership with Jet Airways, if it gets government approval.
Delta previously flew to Mumbai from Atlanta and New York.