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Best Buy Posts Q1 Loss But Results Aren’t As Bad As Expected

For the 13-week first quarter ended May 4, Best Buy Co. Inc. posted a net loss of $81 million, or 24 cents per diluted share, versus net earnings of $158 million, or 46 cents per diluted share, in the year-earlier period. Comparable store sales fell 1.3% in the quarter with domestic comps down 1.1% and international comps down 2.8%, the retailer announced.

However, comparable online sales gained 16.3%, Best Buy stated.

The company reported revenues of $9.38 billion versus $10.37 billion in the year-prior period. Operating income was 1.8% of revenue versus 2.5% in the year-earlier quarter, and diluted EPS from continuing operations was 29 cents versus 49 cents in last year’s period on a GAAP basis. On a non-GAAP basis, operating income was 2% of revenue versus 3.9% in the year-earlier quarter, and diluted EPS from continuing operations was 32 cents versus 76 cents in last year’s period, the company maintained.

The 32 cents figure beat a Thomson Reuter’s average analyst estimate of 25 cents.

“In the first quarter, we continued to make substantial progress on our Renew Blue priorities,” Hubert Joly, Best Buy president and CEO, said in comments on company results. “This progress included driving a 16% increase in domestic comparable online sales, improving our customer Net Promoter Score by over 300 basis points over the last five months, reaching an agreement with Samsung to establish Samsung Experience Shops in our retail stores and beginning their roll out, negotiating overall rent reductions for a number of stores and closing one large format store, and eliminating $175 million in annualized SG&A and supply chain costs. In addition, we are pleased that we were able to reach a definitive agreement to sell our 50% interest in our European business.”

Joly added that, in the first quarter, as Best Buy anticipated, “Domestic comparable store sales were down 1.1%. This was the result of the Super Bowl shifting into last year’s fourth quarter as well as our decision to reduce sales in certain non-core businesses. Excluding these impacts, domestic comparable store sales were flat for the quarter despite no new major product launches and late deliveries in the smartphone category, and we delivered a better-than-expected non-GAAP diluted EPS of 32 cents.”