Best Buy beats on top and bottom lines as retailer aims to reinvigorate sales

Best Buy on Thursday reported first fiscal-quarter results that beat expectations on the top and bottom lines as the electronics retailer tries to break out of a sales slump.

The company said revenue climbed slightly, driven by comparable sales growth of 2%. It reaffirmed its full-year guidance of revenue between $41.2 billion and $42.1 billion, in addition to adjusted earnings per share of $6.30 to $6.60. It expects comparable sales in the range of a decline of 1% to an increase of 1%.

The company said its biggest growth drivers in the quarter were gaming, computing, mobile phones and services, which were partially offset by a decline in sales of appliances.

"Our comparable sales grew 2% versus last year, higher than our outlook, with positive comps across the majority of our major product categories and strong performance in our Best Buy Ads and Marketplace initiatives," CEO Corie Barry said in a release. "We also drove operating income rate expansion and EPS growth."

More retailers including Walmart and Target have leaned into advertising and third-party marketplace businesses, which offer sales growth with higher profit margins than their traditional merchandise does.

Here's how Best Buy performed in its first fiscal quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG:

For the period ended May 2, Best Buy reported net income of $276 million, or $1.31 per share, up from $202 million, or 95 cents per share, in the year-ago period. Revenue rose slightly to $8.94 billion from $8.77 billion the prior year. Excluding one-time expenses, including charges incurred for restructuring its health business, Best Buy reported adjusted earnings per share of $1.28 per share.

The earnings come just over a month after the company named Jason Bonfig as its new CEO, replacing Barry in the fall. The leadership change was part of Best Buy's efforts to increase sales and accelerate its business.

"With this momentum, I believe it is the right time to transition the leadership of Best Buy, and step down as CEO later this year," Barry said in a statement Thursday.

Bonfig said in the Thursday release that he's focused on expanding the company's reach and elevating the experience for customers as he prepares to take the helm on Nov. 1.

Best Buy has been struggling with a sales slump, taking additional hits from higher tariffs and lower consumer confidence. Last quarter, Barry said the company was seeing a divergence in higher-income shoppers and lower-income shoppers, with softness in higher-cost item sales.