Best Buy on Thursday reported fiscal first-quarter results that beat expectations on the top and bottom lines as the electronics retailer tries to break out of a sales slump.
The company said revenue climbed slightly, driven by comparable sales growth of 2%. It reaffirmed its full-year guidance of revenue between $41.2 billion and $42.1 billion, in addition to adjusted earnings per share of $6.30 to $6.60. It expects comparable sales in the range of a decline of 1% to an increase of 1%.
The company said its biggest growth drivers in the quarter were gaming, computing, mobile phones and services, which were partially offset by a decline in sales of appliances.
Shares of Best Buy rose 19% in midday trading.
“Our comparable sales grew 2% versus last year, higher than our outlook, with positive comps across the majority of our major product categories and strong performance in our Best Buy Ads and Marketplace initiatives,” CEO Corie Barry said in a release. “We also drove operating income rate expansion and EPS growth.”
More retailers including Walmart and Target have leaned into advertising and third-party marketplace businesses, which offer sales growth with higher profit margins than their traditional merchandise does.
Here’s how Best Buy performed in its fiscal first quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG:
- Earnings per share: $1.28 adjusted vs. $1.23 expected
- Revenue: $8.94 billion vs. $8.83 billion expected
For the period ended May 2, Best Buy reported net income of $276 million, or $1.31 per share, up from $202 million, or 95 cents per share, in the year-ago period. Revenue rose slightly to $8.94 billion from $8.77 billion the prior year. Excluding one-time expenses, including charges incurred for restructuring its health business, Best Buy reported adjusted earnings per share of $1.28 per share.
The earnings come just over a month after the company named Jason Bonfig as its new CEO, succeeding Barry in the fall. The leadership change was part of Best Buy’s efforts to increase sales and accelerate its business.
“With this momentum, I believe it is the right time to transition the leadership of Best Buy, and step down as CEO later this year,” Barry said in a statement Thursday.
Bonfig said in the Thursday release that he’s focused on expanding the company’s reach and elevating the experience for customers as he prepares to take the helm on Nov. 1.
On a call with reporters on Thursday, Bonfig said the company is leaning into leveraging artificial intelligence with OpenAI and Gemini to improve the customer experience.
Barry also said Best Buy is seeing customers are under pressure from macroeconomic factors like higher gas prices and inflation, but consumers remain “resilient.”
“Technology is more important in people’s lives than it has ever been, and that means everyone is looking for ways they can optimize their life, and they’re looking for ways they can optimize their technology,” Barry told reporters.
Best Buy has been struggling with a sales slump, taking additional hits from higher tariffs and lower consumer confidence. Last quarter, Barry said the company was seeing a divergence in higher-income shoppers and lower-income shoppers, with softness in higher-cost item sales.
Barry said on a call with analysts on Thursday that the company is not concerned rising memory costs will affect electronics purchases.
“We are not seeing any indicators that would say the customer is pulling forward purchases, and in fact, very few really are worried about ‘memory,'” Barry said.
She added that the company is the importer of record for between 2% and 3% of its sales, so while it is “complying with phase one of the tariff refund process,” it expects any money it gets back to be small in the context of its overall sales.
