Best Buy's stock surges as overall sales fall but laptop revenue rises

By Tomi Kilgore and James Rogers

Best Buy reported first-quarter results before market open Thursday

Shares of Best Buy Co. Inc. surged 12.6% in afternoon trading Thursday, after the consumer-electronics and appliances retailer saw an overall sales decline that was steeper than expected, but noted that laptop sales continued to show positive momentum.

"We have seen early signs of improvement as year-over-year comparable sales for laptops turned slightly positive in the fourth quarter, and that trend continued in Q1," Chief Executive Corie Barry said on the earnings call.

See more: The S&P 500's two biggest gainers offer bullish signs for tech spending

Profit performance also seemed to be resonating. Net income for the quarter to May 4 edged up to $246 million, or $1.13 a share, from $244 million, or $1.11 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of $1.20 beat the FactSet consensus of $1.08.

"Today we are reporting better-than-expected Q1 profitability," Barry said in a statement. "We made progress on our FY25 priorities, grew our paid membership base and drove improvements in our customer experiences."

Related: Retailers dominate earnings slate before the open, Dell leads tech after the close

Best Buy's (BBY) revenue declined 6.5% to $8.85 billion, below the FactSet consensus of $8.96 billion, as domestic online revenue fell 6.1%. Same-store sales were down 6.1%, worse than expectations of a 4.9% decline, amid weakness in sales of appliances, home theater, gaming and mobile phones.

"The mix of macro factors continued to create a challenging sales environment for our category during the quarter and our sales were slightly softer than our expectations," Barry said in the statement.

For the full fiscal year, the company affirmed its guidance ranges for adjusted EPS of $5.75 to $6.20, for revenue of $41.3 billion to $42.6 billion and for same-store sales growth to be down 3% to flat. Analysts surveyed by FactSet are looking for adjusted EPS of $6.04, sales of $41.94 billion and same-store sales growth to be down 1.5%.

Related: Best Buy's stock jumps after profit beat, as gaming growth offsets smartphone weakness

The stock has shed 8.2% year to date through Wednesday, while the S&P 500 index has gained 10.4%.

Emily Bary contributed reporting.

-Tomi Kilgore -James Rogers

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05-30-24 1336ET

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