Electronics retailer Best Buy (BBY) reported growth in both profit and sales for its first fiscal quarter, driven by strong demand for gaming hardware, computers, and mobile phones, and as the company prepares for a leadership transition. The stock gained 11.65%.
The company reported Thursday a net profit of $276 million, or $1.31 per share, for the quarter, compared with a net profit of $202 million, or $0.95 per share, a year earlier.
Excluding certain one-time items, adjusted earnings per share were $1.28, exceeding the analyst consensus estimate of $1.23 compiled by FactSet.
Revenue for the quarter increased to $8.94 billion from $8.77 billion in the prior-year period, surpassing analyst expectations of $8.82 billion.
Comparable sales rose 2% year-over-year, outperforming the company's own forecasts. U.S. comparable sales grew 1.8%, while international comparable sales increased 4.7%. Analysts had anticipated overall comparable sales growth of just 0.9%.
Best Buy stated that domestic sales growth was primarily fueled by gaming consoles, computers, mobile phones, and related services, though this was partially offset by a decline in appliance sales.
Additionally, sales in emerging categories such as collectibles, 3D printers, and AI-powered smart glasses doubled compared to the same period last year.
The company noted that while consumers remain value-conscious, they are still willing to spend on innovative, higher-priced technology products.
Internal executive Jason Bonfig, who is set to take over as Chief Executive Officer in November, outlined his strategic priorities. Bonfig will focus on four key areas: transforming Best Buy into an integrated company encompassing retail, media, advertising, and technology; expanding the business footprint; enhancing the customer experience; and maintaining a people-first, customer-centric philosophy.
Chief Financial Officer Matt Bilunas indicated that comparable sales for the second quarter are expected to grow by approximately 1%, due to a high base from the launch of multiple gaming products in June of last year. However, comparable sales for the month of May alone have already shown high single-digit growth.
The company reaffirmed its full-year guidance, expecting adjusted earnings per share in the range of $6.30 to $6.60 and revenue between $41.2 billion and $42.1 billion. Comparable sales for the full year are projected to be flat to slightly up or down, with a variance of no more than 1%.