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Best Buy reported quarterly results on Tuesday.

BRIAN SNYDER/Reuters

Best Buy Co Inc signaled it expected a strong holiday shopping season by forecasting fourth-quarter profit above Wall Street estimates on Tuesday, sending shares of the biggest U.S. consumer electronics retailer up over 8 per cent.

Target Corp and Walmart Inc have already predicted strong sales in the crucial period between Thanksgiving and Christmas that can account for as much as 40 per cent of annual sales for U.S. retailers faced with a slowing economy.

U.S. consumer spending is slowing faster than economists had expected and the latest data has showed pockets of weakness, including in electrical appliances, which are Best Buy’s main market.

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However, Best Buy’s investment in subscription-based repair and tech support services where online retailers like Amazon.com Inc still lag has helped it stay out of the retail gloom by pulling in more customers to its stores. Chief Executive Officer Corie Barry said the company was well prepared for the holidays with new products, strong inventory levels and faster delivery for online purchases.

“The typical Best Buy customer is at or slightly above median income, and this group is currently thriving,” Wedbush analyst Michael Pachter said.

“At the same time, there are an increasing number of new consumer electronics products that have captured interest, including items in the mobile, smart home and wearables categories, all of which Best Buy excels at.”

Best Buy expects fourth-quarter adjusted earnings of $2.65 to $2.75 per share, largely above Wall Street expectation of $2.65, and also forecast upbeat same-store sales growth.

The company also raised its full-year outlook, in contrast to discount store operator Dollar Tree Inc that cut its forecast, citing tariffs on Chinese imports.

In the third quarter, overall same-store sales rose 1.7 per cent, beating analysts’ average estimate of a 1.3 per cent increase, according to IBES data from Refinitiv.

Revenue rose to 1.8 per cent to $9.76 billion, beating expectations of $9.70 billion. Excluding one-time items, Best Buy earned $1.13 per share, ahead of analysts’ estimates of $1.03 per share.

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