Electronics retailer Best Buy reported better-than-expected earnings per share this morning, even as the same-store sales declined at a steepening pace.Click here for updates >
Comparable store sales fell 5.3 per cent during the period, on top of a 3.0 per cent decline a year ago.
Those declines weighed on net income and total sales. Operating income fell 16 per cent to $389 million, or $0.72 per share. Nonetheless, that was better than Wall Street expectations.
Top line results improved marginally, up two per cent to $11.61 billion. The Street had forecast revenue of $11.5 billion.
“Best Buy is in a turnaround, and the strategic priorities we laid out at the beginning of the year are just the first phase of the changes to come,” said Interim Best Buy CEO Mike Mikan. “We know we have to better adapt to the new realities of the marketplace, and we are creating a long-term plan designed to make Best Buy more relevant with customers and position the company for sustained, profitable returns in the years ahead.”
The company continued to see weakness in some of its largest businesses, including notebooks, gaming, digital imaging and televisions. However, new categories like tablets and eReaders, and its greater focus on smartphones, registered growth.
Mobile has become a major contributor to the company’s results — particularly as Best Buy expands in the segment. The company hopes to operate more than 800 mobile-only stores by 2016, up from 305 at the end of the fourth quarter.
During the first quarter, the mobile segment tallied same-store sales growth of 13 per cent.
Best Buy said it had closed 41 of its previously announced 50 big box closures. Total square footage operated by the Minnesota company declined by 100,000 feet to 42.4 million.
The company reiterated its fiscal 2013 guidance, expecting earnings of $3.50 to $3.80 a share before restructuring costs.
Shares rallied more than 8 per cent in pre-market trading, but have given up much of that advance.