News / Business
Best Buy (NYSE: BBY) 1Q Profit Falls 15 Percent, Exceeds Forecasts
Best Buy Co. (NYSE: BBY) reported Tuesday that its first-quarter earnings fell 15% despite rival Circuit City Stores Inc. (NYSE: CC) going out of business.
The earnings exceeded Wall Street analysts’ expectations as Best Buy, the nation's largest consumer electronics seller, maintained its annual profit outlook.
Best Buy stock dropped $2.86, more than seven percent, to $35.80 in late-day trading.
The company earned $153 million, or 36 cents per share, in the quarter that ended May 30. This amount compares with profit of $179 million, or 43 cents per share, a year earlier when federal stimulus checks briefly caused a surge in consumer spending.
Adjusted profit was 42 cents per share. Analysts surveyed by Thomson Reuters expected 34 cents per share.
Revenue rose 12 percent to $10.1 billion as it opened 185 new stores and gained some market share from the
"Our share gains accelerated during the quarter since a major competitor closed its doors, something we've been very purposeful in planning for and -- to be blunt -- taking advantage of," Brian Dunn, Best Buy's president and chief operating officer, told investors during a conference call following the earnings release. Dunn becomes CEO on June 24.
Best Buy, which has about 22 percent of the market in consumer electronics, according to a Deutsche Bank report, hopes its sales staff and its Geek Squad paid service will help differentiate it from discounters like Wal-Mart. Wal-Mart Stores, Inc. (NYSE: WMT) has about 14 percent of the electronics market, according to Deutsche Bank.
Best Buy held to its forecast of annual earnings between $2.50 and $2.90 per share, including restructuring charges. Analysts project $2.79 per share.
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