RICHFIELD, Minnesota — Best Buy's stock jumped in trading Thursday after its first-quarter sales and profit managed to top analysts' expectations.
The big-box electronics retailer, based in Minneapolis, said sales of mobile phones, big televisions and major appliances helped sales, offsetting weakness in tablets and computers.
Overall, the company's net income declined after being pumped up a year earlier by a one-time tax structure change.
It was only a few years ago that critics were about to write Best Buy's obituary, questioning how a big-box retailer could compete in a shifting landscape where shoppers are increasingly researching products at big stores and then buying online for a lower price.
But the results are the latest evidence that Best Buy has been able to successfully navigate a tough consumer electronics business as it wrestles with deflation and increased competition from online stores, notably Amazon.com.
Under CEO Hubert Joly, who took the helm in 2012, Best Buy has been cutting costs, revamping stores and boosting training for its sales help. It's also been rolling out services like shipping goods from all its stores, which means speedier deliveries. And it's been improving the shopping experience at the stores.
The chain has also been working with big suppliers like Samsung to develop home theater areas for shoppers to check out and recently launched a wedding registry on its website. It's also been catering to shoppers' increasing interest in "smart home" technology — the ability to turn down the heater remotely, for example.
Best Buy also is staking out appliances, which accounted for 8 percent of the company's total sales in the latest quarter. It's highlighting appliances in specific kitchen and home areas within its stores.
"Best Buy is back in a big way," Joly told The Associated Press in a phone interview Thursday. "The performance this quarter is an example that we can win in the marketplace." He said the company has been able to move the needle by "being obsessed about the customer."
For the three months ended May 2, Best Buy earned $129 million, or 36 cents per share. That compares with $461 million, or $1.31 per share, a year earlier.
Last year's tax change helped earnings by $1.01 per share.
Excluding certain items, earnings for the current quarter were 37 cents per share. The results beat Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of 29 cents per share.
Revenue declined to $8.56 billion from $8.64 billion, partly hampered by foreign currency fluctuations and the loss of revenue from the consolidation of its Canadian brand. But the performance still beat the $8.52 billion in revenue that 12 analysts surveyed by Zacks expected.
The company posted a 0.6 percent decline at stores opened at least a year in its U.S. business. The metric is a key measure of a retailer's health.
Best Buy Co. announced in March that it consolidated the Future Shop and Best Buy stores and websites in Canada under the Best Buy brand. This led to the closing of 66 Future Shop stores and the conversion of 65 Future Shop stores to the Best Buy brand.
Shares of the company gained $1.78, or a little more than 5 percent, to $35.56 in early afternoon trading.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on BBY at http://www.zacks.com/ap/BBY
Keywords: Best Buy, Earnings Report