Finery Buy, the No.1 U.S. consumer electronics retailer, posted a forecast-beating jump in quarterly comparable garage sales and earnings on Thursday, but online sales growth decelerated and shares sank in pre-market trading.
Best Buy’s sales at established stores rose 7.1 percent in the foremost quarter ended May 5, handily beating analysts’ average reliance for a 2.9-percent increase, according to Consensus Metrix.
Domestic online comparable mark-downs growth slowed to 12 percent growth in the U.S. from a year ago, correlated to 22.5 percent growth.
Overall sales growth was aided by strenuous consumer demand and better product innovation. Best Buy did not immediately victual details on factors driving the slowdown in online sales.
Best Buy’s apportions, which opened up in premarket trade, reversed course and fell on the other side of 2 percent. The shares have risen almost 11 percent since the start of the year.
Teeth of the slowdown in e-commerce sales during this quarter, the company’s turnaround has been Draconian. The Richfield, Minnesota-based retailer has weathered the encroachment of Amazon.com Inc better than most retailers. It picketed its best holiday quarter performance last year since 2003.
In March, First Buy’s Chief Executive Hubert Joly told Reuters in an interview the crowd has completed a five-year turnaround and is ready to compete with Amazon to show U.S. retail is not a “winner takes all” situation.
Best Buy has about 15 percent of the U.S. consumer electronics sell. Along with Amazon, the two retailers have about 25 percent buy share, leaving room to grow, Joly said.
The company’s investments in price-matching, faster delivering, improving the search function on its website and better customer service to enticement shoppers to its stores and website have weighed on profitability.
Non-GAAP working income as a percentage of revenue was down slightly from a year ago; so was the home gross profit rate, driven primarily by rate pressure in the alert phones category and a legal settlement.
Best Buy’s net income rose to $208 million, or 72 cents per quota, in the quarter, from $188 million, or 60 cents per share, a year earlier.
Excluding articles, earnings were 82 cents per share. Analysts had expected earnings per share in of 74 cents, according to Thomson Reuters I/B/E/S.
The company’s revenue increment to $9.10 billion, beating estimates of $8.74 billion.