Minneapolis – Best Buy Co. Inc. swung to a net profit in the first quarter of fiscal 2015 from a net loss in the same period a year earlier, but missed estimates with a drop in sales. The retailer posted net income of $461 million, a big turnaround from a net loss of $81 million.
Best Buy credited its swing to profitability to savings from its Renew Blue cost reduction program and a one-time tax benefit from changes in the structure of its foreign operations. However, net sales fell 3% to $9.03 million from $9.35 million, aided by a 1.9% decline in same-store sales. Analysts had expected a more modest decrease to $9.23 billion in net sales.
Absent any major product launches in what Best Buy expects to be a softening consumer electronics market, the company is expecting same-store sales to be negative in the low-single digits in both the second and third quarters.
“Beyond our financial results, we made progress against our three business imperatives, which are to improve our operational performance; build our foundational capabilities to unlock future growth strategies; and leverage our unique assets to create a differentiated value proposition that is meaningful to our customers and our vendors,” said Hubert Joly, president and CEO of Best Buy.