Best Buy Co., the largest U.S. consumer-electronics retailer, reported first-quarter profit that exceeded analysts’ estimates, helped by demand for smartphones.
Net income fell 25 percent to $158 million, or 46 cents a share, from $212 million, or 65 cents, a year earlier, the Richfield, Minnesota-based company said today in a statement. Profit excluding restructuring costs totaled 72 cents a share. Analysts projected 59 cents, the average of 22 estimates compiled by Bloomberg.
Best Buy lured customers with discounts on smartphones, part of former Chief Executive Officer Brian Dunn’s efforts to compete with Amazon.com Inc. and other online retailers. Sales by stores open at least 14 months fell 5.3 percent as the company seeks Dunn’s replacement following his resignation last month.
The retailer “appears to have continued to drive traffic through promotional activity and value pricing, limiting deeper sales declines,” Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles, wrote in a note May 17. He rates the shares as neutral, equivalent to a hold rating.
Revenue increased 2.1 percent to $11.61 billion, exceeding the $11.49 billion average of 19 analysts’ estimates compiled by Bloomberg.
Best Buy rose 7.3 percent to $19.50 at 7:33 a.m. in New York. The shares had declined 22 percent this year before today.
Dunn, 52, resigned last month amid a board probe that found he had an inappropriate relationship with a female employee. The company said yesterday it selected executive-search firm Spencer Stuart to conduct its hunt for a new CEO after naming director Mike Mikan as interim chief. The search may take as long as nine months, Best Buy said in April.
© Copyright 2022 Bloomberg News. All rights reserved.