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Best Buy Shares Up Pre-Market As Q1 Earnings Beat Estimates

Best Buy Founder Urges Board To Let Him Proceed With Acquisition PlanBest Buy Founder Urges Board To Let Him Proceed With Acquisition Plan

You can almost hear investors breathe a sigh of relief after the troubled consumer electronics chain exceeded their modest expectations for the three months that ended on May 5. The company reported net earnings of $158M, down 25.5% vs the same period last year, on revenues of $11.6B, up 2.1%. Analysts had expected revenues to come in slightly lower, at $11.5B. The reported number would have been -4.3% were it not for an additional week included in this year’s Q1. But earnings from continuing operations — not counting restructuring charges — clocked in at 72 cents a share, beating forecasts for 59 cents. Best Buy made no change in the guidance for its performance in the current fiscal year. At domestic stores open at least a year, entertainment sales — including DVDs — fell 27.8%; the category now accounts for 9% of Best Buy’s domestic revenues, down from 13% this time last year. Consumer electronics sales were -5.4%, and now represent 34% of the domestic business. But computers and mobile phones were +3.6%; the lines account for 43% of domestic revenues. Appliances also were +8.9%. Calling Best Buy “in a turnaround,” interim CEO Mike Mikan says: “We know we have to better adapt to the new realities of the marketplace, and we are creating a long-term plan designed to make Best Buy more relevant with customers and position the company for sustained, profitable returns in the years ahead.”

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