MINNEAPOLIS – Best Buy Co. Inc. (BBY), the nation's biggest consumer electronics retailer, said Tuesday its first-quarter profits rose almost 38 percent as customers bought more big-ticket items and cost-cutting measures took effect. Its shares rose more than 3 percent in early trading.
The retailer earned $234 million, or 47 cents per share, in the three months ended May 27, up from $170 million, or 34 cents per share, during the same period last year. Analysts surveyed by Thomson Financial were expecting 36 cents a share.
Revenues jumped almost 14 percent to $6.96 billion from $6.12 billion.
Sales at stores open 14 months — a key retail measure — grew 4.9 percent. Best Buy said the gain was driven by an increase in the average size of each transaction. The company also said consumers bought more at its Web site, and online revenue grew more than 30 percent.
Best Buy has said it will trim about $300 million a year in spending on items such as advertising, headquarters and corporate expenses. On Tuesday it said it had made a short-term reduction in advertising spending and had reduced spending on travel.
"Our employees exceeded our expectations and delivered sharp cost reductions all across the company," said Darren Jackson, the company's chief financial officer.
The company reiterated its earnings guidance of $2.65 to $2.80 per share for the full year. Analysts are looking for $2.72 a share for the year.
Best Buy shares rose $1.64, or 3.3 percent, to $50.67 in morning trading on the New York Stock Exchange.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox