Author: Juveria Tabassum
Best Buy said Thursday it expects sales in its key computer category to improve this year on renewed demand after its quarterly profit topped Wall Street estimates, benefiting from a membership program and cost-saving efforts.
The company’s shares rose 10% after the electronics retailer also confirmed its full-year guidance.
Demand for AI-enabled laptops and high-end TVs is helping Best Buy regain lost sales ground nationally as consumers look to upgrade or replace their gadgets after more than two years of cutting back on electronics spending.
The company also hopes to introduce Copilot+ computers equipped with artificial intelligence, which are scheduled to go on sale on June 18.
Best Buy CEO Corie Barry said in a post-earnings earnings call that the company expects more than 40% of its product lineup to be exclusive to it at launch.
“We know that more of our key categories will return to historically outperforming growth as more technology innovations emerge,” Barry added.
The company also benefited from customers signing up for a two-tier membership program, which it revamped last year, helping the top U.S. electronics retailer retain customers and achieve higher margins.
First-quarter adjusted earnings per share of $1.20 were ahead of expectations of $1.08, according to LSEG data.
Best Buy maintained its annual comparable home sales forecast of a decline of as much as 3%, and Chief Financial Officer Matt Bilunas said the company believes the trend is toward the mid-range as sales improve sequentially.
“The company is managing profitability well thanks to the benefits of its paid membership program, service sales growth and expense cuts,” said Wedbush analyst Seth Basham, adding that Best Buy maintaining its annual guidance is positive.
Best Buy reported a 6.1% decline in quarterly comparable sales, while analysts expected a decline of 4.94%.
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