First quarter same store sales at Best Buy fell a greater than expected 1.3% due to declining sales of consumer electronics and competition from online retailers.
While the retailer experienced growth in computing, gaming and appliances, it was more than offset by declines in other categories, including tablets, services and home theater. President and CEO Hubert Joly focused on the positive, however.
“This quarter reflects continued progress in our Renew Blue transformation. From a financial perspective, we delivered just over $9 billion in revenue and a better-than-expected $0.33 in non-GAAP diluted earnings per share,” said Joly, adding that the company achieved market share gains in the U.S., fueled, in part, by improved price competitiveness.
According to Joly, the company also improved its operational performance, built its foundational capabilities to unlock future growth strategies and leveraged its assets to create a differentiated value proposition to its customers and vendors.
“This progress included leveraging our new ship-from-store and digital marketing capabilities to help drive a 29% increase in domestic comparable online sales; announcing new home theater stores-within-a-store vendor partnerships with Samsung and Sony; launching new mobile installment billing programs; and increasing our annualized Renew Blue cost reductions by $95 million,” explained Joly.
Looking ahead, Best Buy anticipates continued industry-wide sales declines in the second and third quarter in many of the consumer electronics categories in which it competes. The retailer also expects weak sales in the mobile phone category. The company therefore expects comparable sales to be negative in the low-single digits in the next two quarters.