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NEW YORK (AP) — Best Buy posted strong sales of mobile phones, appliances, and smart computing products as it showed in its financial results that store chains can still thrive as shoppers buy more online.
The nation's largest consumer electronic was also buoyed by stronger consumer confidence in reporting first-quarter revenue and profits that beat Wall Street estimates. Sales at established stores rose 7.1 percent.
Still, Best Buy shares fell nearly 7 percent Thursday as investors were disappointed that the company didn't raise its full-year financial outlook.
Only a few years ago, naysayers were writing Best Buy's obituary. But the Minneapolis-based company has surprised investors with its resilience.
Best Buy has improved the store experience, allowing shoppers to test new technology. It's invested in price matching and offers speedier delivery options.
It's also been expanding its tech support services, hoping to deepen its relationship with shoppers. That includes a free service in big cities where salespeople visit customers at home to make recommendations on TVs, setup and more. It also just launched a service that costs $199.99 a year that offers unlimited Geek Squad technical support and many other services.
And it's even joined with Amazon to let the online leader sell its voice-controlled TVs at its stores.
CEO Hubert Joly said Best Buy is also benefiting from the woes of retailers like Sears Holdings Corp., particularly when it comes to major appliances.
"Today's robust results from Best Buy serve as a reminder that with focus and effort it is possible for any retailer to succeed against Amazon and other online players," wrote Neil Saunders, managing director of GlobalData Retail in a note.
Best Buy's shares since the beginning of the year and over the past 52 weeks have far exceeded all three major U.S. indexes. But they tumbled Thursday after the company didn't change its outlook, down $5.15 to $70.80.
The chain expects second-quarter earnings per share of 77 cents to 82 cents, which left a lot of space below the average analyst projection of 82 cents per share. It reiterated its full-year outlook for earnings of $4.80 to $5 per share. Analysts expect $4.98 per share.
First-quarter profit rose 10.6 percent to $208 million, or 72 cents per share. Earnings, adjusted for restructuring costs and pretax expenses, were 82 cents per share, easily beating industry analyst per-share expectations of 75 cents.
Revenue of $9.11 billion also topped Street forecasts.
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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 https://www.zacks.com/ap/BBY
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