Not long ago, it seemed as if Best Buy was destined for the same fate as Circuit City. Profits were down, with many customers using the big box chain as a glorified showroom before making their actual purchases through Amazon. But today the retailer surprised Wall Street with stronger than expected earnings, turning its first quarterly profit in a year. Best Buy's net profits surged to $266 million, up from a meager $12 million in the same quarter one year ago. It's obviously too early to say whether the chain has decisively turned things around, but CEO Hubert Joly has managed a small victory with today's financial report.
Analysts are attributing the successes to cost-cutting measures Joly has taken; since he came into the role, Best Buy has abandoned the European market, thinned out its management structure, and closed down some of its worst-performing stores. Perhaps more importantly, it has also taken strides to hold onto consumers by instituting an aggressive price match policy and opening "boutique" store-within-store shops for Samsung and, more recently, Microsoft.