Best Buy's stock rallied Tuesday after the electronics retailer reported a substantial gain in quarterly earnings, helped by aggressive cost cutting.

Best Buy (BBY) said earnings jumped to $266 million in the quarter ended Aug. 3, compared with $12 million in the year-ago quarter.

The company's stock closed up 13.3% to $34.81. That helped it unseat Netflix (NFLX) as the S&P 500's top performer this year.

Chief Executive Hubert Joly said Best Buy cut $65 million in annualized costs. He said the company has managed to slash $390 million in nine months, as part of an effort to cut $725 million.

Looking ahead, Joly was a little cautious, noting that Best Buy has incurred some additional costs and an interruption in same store sales growth as it rolls out its new Samsung Experience Shops and Microsoft (MSFT) Windows Stores. Same-store sales slipped 0.4% for the quarter, but Joly said they would have been flat to slightly higher if not for the Samsung roll-out.

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Belus Capital Advisors chief equities strategist Brian Sozzi noted that Best Buy has made a big splash online, where same-store sales rose 10.5%.

"The sales number is even more impressive considering Best Buy's entirely new website won't launch until 2014, leading me to believe that price matching, and advertising of price matching, is closing the price perception gap with Amazon (AMZN)," he said in a research note.

But Sozzi said Best Buy still has some work to do.

"Structurally Best Buy online is not where it has to be to compete effectively, and may be longer away from achieving financial awesomeness (yes, awesomeness)," he said. "For example, keywords on Google (GOOG) for certain electronics bring up Best Buy on the dreaded ... second page. The team is actively working on improving its SEO."